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Sponsor Statement for HB 483
Procurement of Group Health Insurance

An Act authorizing state procurement of group insurance for employees of child care facilities, entities licensed as residential child care facilities, child placement agencies, foster homes, and maternity houses, and certain adult residential and day services providers, and for employees of certain nonprofit entities; repealing a provision of the state group insurance procurement law relating to payment of dividends and clarifying a provision of that law relating to part-time employees; authorizing the commissioner of administration to adopt regulations regarding state procurement of group insurance; and providing for an effective date.

HB 483 authorizes the Commissioner of Administration to procure group health insurance for state grantees, nonprofit organizations, foster care homes, and child and adult care providers. This insurance pooling plan will create large enough groups to achieve economies of scale and thus more affordable premiums for the participants.

The vast majority of these employees are on a lower pay scale compared to the rest of the workforce, even though their services are critical to family stability and societal well-being. They often have no way to cover health insurance costs without cutting into basic cost-of-living expenses. HB 483 provides a means to offer affordable health insurance for these employees.

Many of the agencies receiving state grants to operate are now paying extremely high insurance rates. Under this legislation their insurance costs would be lowered due to being a part of a larger group. Thus more of their dollars could be used to provide services to the public rather than paying overhead costs.

The Department of Administration's role under HB 483 is limited to procuring an insurance policy or policies from the private insurance industry, which eligible organizations may then elect to purchase from the insurance company. Premiums will be paid directly by the participant to the insurance company.

HB 483 makes two technical changes to the statute on state procurement of group insurance: it eliminates an obsolete provision (page 3, lines 26-29), and clarifies that a provision relating to state contributions for part-time employees pertains only to part-time state employees (page 4, line 5).

It also adds a provision authorizing the Commissioner of Administration to adopt regulations pertaining to the procurement of group insurance. The Commissioner has always had the implicit authority to adopt such regulations, but this bill would make the authority explicit.

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