SB 366                                           First Engrossed
    1                        A bill to be entitled                      
    2         An act relating to group insurance for public
    3         employees; amending s. 112.08, F.S.; requiring that
    4         school districts procure certain types of insurance
    5         for their officers and employees through interlocal
    6         agreements; providing an exception; requiring each
    7         school district to enter into an interlocal agreement
    8         and establish the School District Insurance Consortium
    9         governed by a board of directors; providing for
   10         membership and specifying terms of office for board
   11         members; authorizing the board to employ staff or
   12         contract for staffing services to be provided to the
   13         consortium; requiring the Department of Management
   14         Services to provide technical services to the
   15         consortium; requiring the consortium to advertise for
   16         competitive bids for insurance; authorizing the
   17         awarding of bids on a statewide or regional basis and
   18         the selection of multiple insurance providers;
   19         requiring that school districts engage in collective
   20         bargaining with certified bargaining agents; amending
   21         s. 373.605, F.S.; authorizing a water management
   22         district to provide group insurance for the employees
   23         of another water management district as well as its
   24         own employees; providing an effective date.
   26  Be It Enacted by the Legislature of the State of Florida:
   28         Section 1. Subsection (2) of section 112.08, Florida
   29  Statutes, is amended to read:
   30         112.08 Group insurance for public officers, employees, and
   31  certain volunteers; physical examinations.—
   32         (2)(a) Notwithstanding any general law or special act to
   33  the contrary and except as provided under paragraph (c), every
   34  local governmental unit may is authorized to provide and pay out
   35  of its available funds for all or part of the premium for life,
   36  health, accident, hospitalization, legal expense, or annuity
   37  insurance, or all or any kinds of such insurance, for the
   38  officers and employees of the local governmental unit and for
   39  health, accident, hospitalization, and legal expense insurance
   40  for the dependents of such officers and employees upon a group
   41  insurance plan and, to that end, to enter into contracts with
   42  insurance companies or professional administrators to provide
   43  such insurance.
   44         (a) Before entering any contract for insurance, the local
   45  governmental unit shall advertise for competitive bids,; and
   46  such contract shall be let upon the basis of such bids. If a
   47  contracting health insurance provider becomes financially
   48  impaired as determined by the Office of Insurance Regulation of
   49  the Financial Services Commission or otherwise fails or refuses
   50  to provide the contracted-for coverage or coverages, the local
   51  government may purchase insurance, enter into risk management
   52  programs, or contract with third-party administrators and may
   53  make such acquisitions by advertising for competitive bids or by
   54  direct negotiations and contract. The local governmental unit
   55  may undertake simultaneous negotiations with those companies
   56  that which have submitted reasonable and timely bids and are
   57  found by the local governmental unit to be fully qualified and
   58  capable of meeting all servicing requirements. Each local
   59  governmental unit may self-insure any plan for health, accident,
   60  and hospitalization coverage or enter into a risk management
   61  consortium to provide such coverage, subject to approval based
   62  on actuarial soundness by the Office of Insurance Regulation;
   63  and each shall contract with an insurance company or
   64  professional administrator qualified and approved by the office
   65  to administer such a plan.
   66         (b) In order to obtain approval from the Office of
   67  Insurance Regulation of any self-insured plan for health,
   68  accident, and hospitalization coverage, each local governmental
   69  unit or consortium shall submit its plan along with a
   70  certification as to the actuarial soundness of the plan, which
   71  certification is prepared by an actuary who is a member of the
   72  Society of Actuaries or the American Academy of Actuaries. The
   73  Office of Insurance Regulation may shall not approve the plan
   74  unless it determines that the plan is designed to provide
   75  sufficient revenues to pay current and future liabilities, as
   76  determined according to generally accepted actuarial principles.
   77  After implementation of an approved plan, each local
   78  governmental unit or consortium shall annually submit to the
   79  Office of Insurance Regulation a report that which includes a
   80  statement prepared by an actuary who is a member of the Society
   81  of Actuaries or the American Academy of Actuaries as to the
   82  actuarial soundness of the plan. The report is due 90 days after
   83  the close of the fiscal year of the plan. The report must
   84  include shall consist of, but need is not be limited to:
   85         1. The adequacy of contribution rates in meeting the level
   86  of benefits provided and the changes, if any, needed in the
   87  contribution rates to achieve or preserve a level of funding
   88  deemed adequate to enable payment of the benefit amounts
   89  provided under the plan and a valuation of present assets, based
   90  on statement value, and prospective assets and liabilities of
   91  the plan and the extent of any unfunded accrued liabilities.
   92         2. A plan to amortize any unfunded liabilities and a
   93  description of actions taken to reduce unfunded liabilities.
   94         3. A description and explanation of actuarial assumptions.
   95         4. A schedule illustrating the amortization of any unfunded
   96  liabilities.
   97         5. A comparative review illustrating the level of funds
   98  available to the plan from rates, investment income, and other
   99  sources realized over the period covered by the report with the
  100  assumptions used.
  101         6. A statement by the actuary that the report is complete
  102  and accurate and that in the actuary’s opinion the techniques
  103  and assumptions used are reasonable and meet the requirements
  104  and intent of this subsection.
  105         7. Other factors or statements as required by the office in
  106  order to determine the actuarial soundness of the plan.
  108  All assumptions used in the report must shall be based on
  109  recognized actuarial principles acceptable to the Office of
  110  Insurance Regulation. The office shall review the report and
  111  shall notify the administrator of the plan and each entity
  112  participating in the plan, as identified by the administrator,
  113  of any actuarial deficiencies. Each local governmental unit is
  114  responsible for payment of valid claims of its employees which
  115  that are not paid within 60 days after receipt by the plan
  116  administrator or consortium.
  117         (c)Beginning July 1, 2013, or upon the expiration or
  118  renewal date of any existing contract, whichever occurs later,
  119  school districts shall procure health, accident, and
  120  hospitalization insurance through a purchasing interlocal
  121  agreement unless the school board at a duly noticed public
  122  meeting determines that purchasing insurance outside the plan
  123  procured through the interlocal agreement, as provided under
  124  paragraphs (a) and (b), is financially advantageous to the
  125  school district.
  126         1. Each school district shall enter into an interlocal
  127  agreement as provided in s. 163.01 in order to establish the
  128  School District Insurance Consortium through which such
  129  insurance shall be procured for officers and employees of the
  130  school district and their dependents.
  131         2. The consortium shall be governed by a board of directors
  132  comprised of nine members, three of whom shall be elected school
  133  board members appointed by the Florida School Boards
  134  Association, Inc., three of whom shall be elected or appointed
  135  superintendents of schools appointed by the Florida Association
  136  of District School Superintendents, Inc., two of whom shall be
  137  public school teachers or support personnel appointed by the
  138  Florida Education Association, and one of whom shall have
  139  experience in running employee-benefit systems, to be appointed
  140  by the other members of the consortium. Consortium board members
  141  shall be appointed to 2-year terms. The board may employ staff
  142  or contract for staffing services to be provided to the
  143  consortium. The Department of Management Services shall provide
  144  technical services to the consortium as requested by the board.
  145         3. Notwithstanding any other provision of law, the
  146  consortium shall advertise for competitive bids for such
  147  insurance, and the contracts for such insurance shall be let
  148  upon the basis of such bids. The consortium shall advertise for
  149  proposals for a statewide insurance plan as well as plans
  150  providing coverage on a regional basis. In determining
  151  appropriate regions, the consortium shall group school districts
  152  geographically in a manner that includes school districts of
  153  varying sizes for the purpose of ensuring the availability of
  154  coverage for all districts in the region. Contracts may be
  155  awarded on a statewide or regional basis, and more than one
  156  provider may be selected to provide insurance. School districts
  157  shall engage in collective bargaining with the certified
  158  bargaining agent for any unit of employees for which health,
  159  accident, or hospitalization insurance is provided, as required
  160  by part II of chapter 447, with regard to coverage offered, cost
  161  for dependent coverage, deductibles, optional coverage, and
  162  other matters that are subject to collective bargaining as
  163  required by state law.
  164         (d)(c) Every local governmental unit may is authorized to
  165  expend funds for preemployment physical examinations and
  166  postemployment physical examinations.
  167         Section 2. Section 373.605, Florida Statutes, is amended to
  168  read:
  169         373.605 Group insurance for water management districts.—
  170         (1) The governing board of a any water management district
  171  may is hereby authorized and empowered to provide group
  172  insurance for its employees, or for its employees and the
  173  employees of another water management district, in the same
  174  manner and with the same provisions and limitations authorized
  175  for other public employees under by ss. 112.08, 112.09, 112.10,
  176  112.11, and 112.14.
  177         (2) Any and all insurance agreements in effect as of
  178  October 1, 1974, which conform to the provisions of this section
  179  are hereby ratified.
  180         Section 3. This act shall take effect July 1, 2012.