H*3683(Rat #0138, Act #0062 of 2001)  General Bill, By Kelley
 A BILL TO AMEND SECTION 1-11-710, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA,
 1976, RELATING TO INSURANCE FOR STATE EMPLOYEES AND SCHOOL DISTRICT EMPLOYEES,
 SO AS TO REQUIRE ANNUAL STATE BUDGET AND CONTROL BOARD APPROVAL OF THE NEXT
 CALENDAR YEAR'S PLAN OF BENEFITS, ELIGIBILITY, AND CONTRIBUTIONS BY AUGUST
 FIFTEENTH PRECEDING THE CALENDAR YEAR RATHER THAN OCTOBER FIRST, AND TO
 REFERENCE THE SPECIFIC AUTHORIZATION FOR THE INSURANCE RESERVE FUND TO
 REINSURE GROUP HEALTH AND CAFETERIA PLANS; TO AMEND SECTION 9-1-60, AS
 AMENDED, RELATING TO THE IMPLEMENTATION OF CAFETERIA PLANS, SO AS TO PROVIDE
 RESTRICTIONS ON POLITICAL SUBDIVISIONS PARTICIPATING IN THESE PLANS AND ALLOW
 AN EMPLOYER OR COALITION OF EMPLOYERS TO OFFER SUCH PLANS SUBJECT TO THE SAME
 RESTRICTIONS, AND TO MAKE THE IMPLEMENTATION OF THESE CHANGES IN THE LAWS
 RELATING TO CAFETERIA PLANS CONTINGENT ON A FAVORABLE RULING FROM THE INTERNAL
 REVENUE SERVICE.-AMENDED TITLE

   03/07/01  House  Introduced and read first time HJ-30
   03/07/01  House  Referred to Committee on Ways and Means HJ-31
   04/05/01  House  Committee report: Favorable Ways and Means HJ-8
   04/11/01  House  Read second time HJ-50
   04/11/01  House  Unanimous consent for third reading on next
                     legislative day HJ-52
   04/12/01  House  Read third time and sent to Senate HJ-6
   04/17/01  Senate Introduced and read first time SJ-12
   04/17/01  Senate Referred to Committee on Finance SJ-12
   05/09/01  Senate Committee report: Favorable Finance SJ-25
   06/04/01  Senate Amended SJ-21
   06/04/01  Senate Read second time SJ-21
   06/04/01  Senate Unanimous consent for third reading on next
                     legislative day SJ-21
   06/05/01  Senate Read third time and returned to House with
                     amendments SJ-17
   06/05/01  House  Concurred in Senate amendment and enrolled HJ-110
   06/07/01         Ratified R 138
   06/22/01         Signed By Governor
   07/03/01         Effective date 06/22/01
   07/03/01         Copies available
   07/03/01         Act No. 62

AN ACT TO AMEND SECTION 1-11-710, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INSURANCE FOR STATE EMPLOYEES AND SCHOOL DISTRICT EMPLOYEES, SO AS TO REQUIRE ANNUAL STATE BUDGET AND CONTROL BOARD APPROVAL OF THE NEXT CALENDAR YEAR'S PLAN OF BENEFITS, ELIGIBILITY, AND CONTRIBUTIONS BY AUGUST FIFTEENTH PRECEDING THE CALENDAR YEAR RATHER THAN OCTOBER FIRST, AND TO REFERENCE THE SPECIFIC AUTHORIZATION FOR THE INSURANCE RESERVE FUND TO REINSURE GROUP HEALTH AND CAFETERIA PLANS; TO AMEND SECTION 9-1-60, AS AMENDED, RELATING TO THE IMPLEMENTATION OF CAFETERIA PLANS, SO AS TO PROVIDE RESTRICTIONS ON POLITICAL SUBDIVISIONS PARTICIPATING IN THESE PLANS AND ALLOW AN EMPLOYER OR COALITION OF EMPLOYERS TO OFFER SUCH PLANS SUBJECT TO THE SAME RESTRICTIONS, AND TO MAKE THE IMPLEMENTATION OF THESE CHANGES IN THE LAWS RELATING TO CAFETERIA PLANS CONTINGENT ON A FAVORABLE RULING FROM THE INTERNAL REVENUE SERVICE.

Be it enacted by the General Assembly of the State of South Carolina:

State health insurance plans approval date

SECTION 1. Section 1-11-710(A)(2) of the 1976 Code, as last amended by Act 145 of 1995, is further amended to read:

"(2) approve by August fifteenth of each year a plan of benefits, eligibility, and employer, employee, retiree, and dependent contributions for the next calendar year. The board shall devise a plan for the method and schedule of payment for the employer and employee share of contributions. Provided that the Budget and Control Board, by July 1 of the current fiscal year, shall develop and implement a plan increasing the employer contribution rates of the State Retirement System to a level adequate to cover the employer's share for the current fiscal year's cost of providing health and dental insurance to retired state and school district employees. The plan must include a method for the distribution of the funds appropriated as provided by law which are designated for retiree insurance and also must include a method for allocating to school districts, excluding EIA funding, sufficient general fund monies to offset the additional cost incurred by these entities in their federal and other fund activities as a result of this employer contribution charge.

The amounts appropriated in this section shall constitute the state's pro rata contributions to these programs except the State shall pay its pro rata share of health and dental insurance premiums for retired state and public school employees for the current fiscal year."

Reinsurance

SECTION 2. Section 1-11-710(B) of the 1976 Code is amended to read:

"(B) The board may authorize the Insurance Reserve Fund to provide reinsurance, in an approved format with actuarially developed rates, for the operation of the group health insurance or cafeteria plan program, as authorized by Section 9-1-60, for active and retired employees of the State, and its public school districts and their eligible dependents. Premiums for reinsurance provided pursuant to this subsection must be paid out of state appropriated and other funds received for actual health insurance or cafeteria plan premiums due."

Cafeteria plans

SECTION 3. Section 9-1-60(B) of the 1976 Code, as last amended by Act 181 of 1993, is further amended to read:

"(B) Political subdivisions may develop and implement a program for the administration of a flexible benefits or 'cafeteria' plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For political subdivisions that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section."

Cafeteria plans

SECTION 4. Section 9-1-60 of the 1976 Code, as last amended by Act 181 of 1993, is further amended by adding:

"(C) An employer or coalition of employers working in concert may develop and implement a program for the administration of a flexible benefits or 'cafeteria' plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For employers or coalition of employers working in concert, that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section."

Contingent on IRS ruling

SECTION 5. The implementation of the "parallel" cafeteria plans authorized in Sections 3 and 4 of this act is contingent on a ruling from the Internal Revenue Service that such "parallel" plans may be tested alone for purposes of discrimination testing and not aggregated with the cafeteria plan maintained by the State.

Time effective

SECTION 6. This act takes effect upon approval by the Governor.

Ratified the 7th day of June, 2001.

Approved the 22nd day of June, 2001.