Amendment ASA1-AB304

LRBs0095/1

RAC/PJK/JTK/MES:cjs:rs

2003 - 2004 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2003 ASSEMBLY BILL 304

June 4, 2003 - Offered by Representatives McCormick, Albers, Gielow, Grothman, Gunderson, Hahn, Hines, Jensen, Kestell, Krawczyk, Ladwig, F. Lasee, Lothian, Musser, Pettis, Seratti, Stone, Van Roy, Vrakas, Vukmir, Weber, Wieckert and J. Wood.

AB304-ASA1,2,8 An Act to renumber and amend 62.61 and 66.0137 (5); to amend 40.02 (25) (bm), 66.0137 (1), 111.70 (1) (a), 111.70 (4) (cm) 7r. d., 111.70 (4) (cm) 7r. e., 111.70 (4) (cm) 7r. f., 111.70 (4) (cm) 7r. g., 111.70 (4) (cm) 7r. h. and 632.797 (5); and to create 22.07 (10), 22.07 (11), 62.61 (2), 62.61 (3), 66.0137 (5) (b), (c) and (d), 111.70 (4) (c) 2m., 111.70 (4) (jm) 4m., 111.70 (4) (n), 111.70 (4) (o), 111.77 (6) (dm), 601.41 (10), 601.41 (11), 601.41 (12), 610.66 and 632.797 (1) (d) of the statutes; relating to: collective bargaining over health care coverage for municipal employees; allowing municipal employers to change health care coverage plan providers; factors considered in rendering a collective bargaining arbitration decision; requiring the Group Insurance Board to prepare a report on offering group health insurance plans at different cost levels to local government employers and employees; requiring the Group Insurance Board to offer for purchase long-term care insurance policies to employees of local governments; convening a task force to conduct a feasibility study on forming a state pool for the bulk purchasing of prescription drugs; disclosure of health insurance claims experience of local governmental units; bids submitted to local governmental units for health insurance; requiring the Commissioner of Insurance to promulgate rules establishing uniform forms for local government health care coverage requests for proposals and health claims experience and summarizing benefits provided under health care benefit plans; and granting rule-making authority.

Analysis by the Legislative Reference Bureau

This substitute amendment makes several changes to health insurance plans and other benefits offered to local government employees.

Collective bargaining

Under the Municipal Employment Relations Act (MERA), all matters relating to wages, hours, and conditions of employment are subject to collective bargaining. This substitute amendment provides that local governmental employers, with the exception of school district employers with respect to their professional employees, are prohibited from bargaining over the selection of a health care coverage plan if the employer offers to enroll its employees in a plan provided to local government employers by the Group Insurance Board or in a plan that is substantially similar to the plan offered by the Group Insurance Board. Under the substitute amendment, the Office of the Commissioner of Insurance (OCI) must promulgate rules that set out standardized benefits under health care coverage plans and that may be used for determining whether any health care coverage plan is similar to the plan offered by the group insurance board.

In addition, the substitute amendment provides that under MERA any employer may unilaterally change its employees' health care coverage plan provider if the benefits remain substantially the same and the actual providers of the health care are the same. The substitute amendment requires, however, that 50% of the net savings that accrue to the employer as a result of changing the health care coverage plan provider must be used to increase the wages paid to the employees affected by the change or the pay wage-related costs incurred by the employer for those employees in the 12-month period following the effective date of the change.

Under MERA, for labor disputes that go to arbitration, the arbitrator or arbitration panel must consider a variety of factors, some of which are given "greatest weight"; some of which are given "greater weight"; and some of which must simply be considered. Among the factors that must simply be considered are the wages, hours, and conditions of employment of employees providing similar services and of employees in public and in private employment in the same and comparable communities. This substitute amendment provides that the arbitrator or arbitration panel must consider the wages, hours, and conditions of employment of the employees as a whole and not in isolation. In addition, another factor that must be considered is the average consumer prices for goods and services, commonly known as the cost of living. The substitute amendment provides that included in this cost of living factor are the average housing costs and other costs significantly affecting the quality of life.

Health insurance plan study

This substitute amendment requires the Group Insurance Board to study the feasibility of developing a group health insurance plan with at least three cost levels and a low-cost health insurance plan that provides coverage for catastrophic illness or injury.

Long-term care insurance

Under current law, the Group Insurance Board offers to state employees a long-term care insurance plan in which a state employee may purchase for himself or herself or for his or her spouse or parent or spouse's parent long-term care insurance. This substitute amendment requires the Group Insurance Board to offer this insurance to other government employers and their employees.

Interagency task force on bulk purchasing of prescription drugs

This substitute amendment directs the Secretary of Administration to organize an interagency task force on bulk purchasing of prescription drugs. The task force must examine the following: which state agencies would benefit from the bulk purchasing of prescription drugs; which methods of purchasing prescription drugs would result in the greatest cost savings; whether the state should directly administer the bulk purchasing of prescription drugs or whether the state should contract with a private entity; whether combining prescription drug purchasing efforts with other states is feasible and cost effective; how local governmental units could participate in the bulk purchasing of prescription drugs; whether it is feasible to include private sector entities in the bulk purchasing of prescription drugs; and the estimated cost savings that could be realized from the bulk purchasing of prescription drugs.

Solicitation of health insurance bids

Current law authorizes local governmental employers (which includes cities, villages, towns, counties, school districts, sewerage districts, drainage districts, and any other political subdivisions of the state) to offer health care coverage to their employees and employees' spouses and dependents. This substitute amendment requires OCI to promulgate rules developing a uniform form that a local government must use to solicit bids for its employees' health care coverage; requires insurers to use the form to submit bids to local governments; requires local governments that receive the bids to submit information about the bids to the Department of Electronic Government (DEG); and requires DEG to make the information available to the public, except information relating to a local government that has fewer than 50 employees.

Health claims experience

Under current law, an insurer must provide aggregate claims experience information, upon request, to the policyholder of a group health insurance policy and to an employer that provides health care coverage to its employees through a multiple-employer trust. This requirement applies only if the policyholder or employer provides coverage under the policy for at least 50 individuals, excluding individuals who are covered as dependents. Information must be provided for the current policy period and for up to two immediately preceding policy periods if the insurer provided coverage during those periods, but information is not required to be provided for any period of time that is before 18 months before the date of the request. The insurer must provide the information within 30 days after receiving the request and may not charge for providing the information one time in a 12-month period but may charge for additional requests during that time period.

This substitute amendment does the following:

1. Requires a local governmental unit, which includes a city, village, town, county, school district, sewerage district, drainage district, and any other political subdivision of the state, that requests aggregate group health claims experience that an insurer is required to provide to notify DEG when the local governmental unit requests the information.

2. Requires an insurer to provide to DEG the aggregate group health claims experience information that it provides to a local governmental unit at the same time that the insurer provides the information to the local governmental unit.

3. Requires OCI to develop, by rule, a uniform form for insurers to use when providing aggregate group health claims experience information to local governmental units and requires insurers to use the form when providing the information to local governmental units and to DEG.

4. Requires DEG to make the aggregate group health claims experience information that it receives from insurers available to the public, except that, prior to making the information available to the public, DEG must provide written notification of the proposed release to each local governmental unit to which the information relates. If the local governmental unit files a written request with DEG to withhold the information relating to that local governmental unit from public access, DEG must withhold the information from public access.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB304-ASA1, s. 1 Section 1. 22.07 (10) of the statutes is created to read:

AB304-ASA1,5,5 22.07 (10) Make available to the public without charge to local governmental units, the information received from local governmental units under s. 66.0137 (5) (c), except information received from local governmental units that have fewer than 50 employees, in a manner determined by the department to enable the general public to make meaningful comparisons of the bids received. The department shall specify the format that local governmental units shall use in submitting the information and shall make information about the format readily available to local governmental units.

AB304-ASA1, s. 2 Section 2. 22.07 (11) of the statutes is created to read:

AB304-ASA1,5,14 22.07 (11) Make available to the public the aggregate group health claims experience information received from insurers under s. 632.797 (1) (d) in the manner determined by the department. Prior to making the information available to the public, the department shall provide written notification of the proposed release to each local governmental unit to which the information relates. If the local governmental unit files a written request with the department to withhold the information relating to that unit from public access under s. 19.35 (1), the department shall withhold that information from public access under s. 19.35 (1).

AB304-ASA1, s. 3 Section 3. 40.02 (25) (bm) of the statutes is amended to read:

AB304-ASA1,5,23 40.02 (25) (bm) For the purpose of long-term care insurance, in addition to any state annuitant under s. 40.02 (54m), any employee of the state who received a salary or wages from an employer in the previous calendar year, and any participant who was at one time employed by the state who receives a lump sum payment under s. 40.25 (1) which would have been an immediate annuity if paid as an annuity, if the employee is a resident of this state and meets all of the requirements for an immediate annuity including filing of an application, whether or not final administrative action has been taken.

AB304-ASA1, s. 4 Section 4. 62.61 of the statutes is renumbered 62.61 (1) and amended to read:

AB304-ASA1,6,16 62.61 (1) Health insurance; 1st class cities. The common council of a 1st class city may, by ordinance or resolution, provide for, including the payment of premiums of, general hospital, surgical and group insurance for both active and retired city officers and city employees and their respective dependents in private companies, or may, by ordinance or resolution, elect to offer to all of its employees a health care coverage plan through a program offered by the group insurance board under ch. 40. Municipalities which elect to participate under s. 40.51 (7) are subject to the applicable sections of ch. 40 instead of this section subsection. Contracts for insurance under this section subsection may be entered into for active officers and employees separately from contracts for retired officers and employees. Appropriations may be made for the purpose of financing insurance under this section subsection. Moneys accruing to a fund to finance insurance under this section subsection, by investment or otherwise, may not be diverted for any other purpose than those for which the fund was set up or to defray management expenses of the fund or to partially pay premiums to reduce costs to the city or to persons covered by the insurance, or both.

AB304-ASA1, s. 5 Section 5. 62.61 (2) of the statutes is created to read:

AB304-ASA1,6,21 62.61 (2) If a 1st class city solicits bids to provide health care coverage under sub. (1), the 1st class city shall use the uniform local governmental health care coverage request-for-proposals form developed by the commissioner of insurance under s. 601.41 (10) to solicit the bids.

AB304-ASA1, s. 6 Section 6. 62.61 (3) of the statutes is created to read:

AB304-ASA1,7,3 62.61 (3) A 1st class city shall submit information about a bid it receives to the department of electronic government in the format specified under s. 22.07 (10) no later than 30 days after the bid is received or, in the case of a sealed bid, no later than 30 days after the bid is opened. At the time the information is submitted to the department of electronic government, the 1st class city shall do at least one of the following:

AB304-ASA1,7,4 (a) Post the same information on the city's Internet site, if any.

AB304-ASA1,7,6 (b) Post notice on the city's Internet site, if any, that the information has been submitted to the department of electronic government.

AB304-ASA1,7,10 (c) Post or publish as a class 1 notice under ch. 985 a statement that the information has been submitted to the department of electronic government and will be available on the state's Internet site, if any, or a statement that the information may be viewed at a specified location in the 1st class city, or both.

AB304-ASA1, s. 7 Section 7. 66.0137 (1) of the statutes is amended to read:

AB304-ASA1,7,15 66.0137 (1) Definition. In this section, "local governmental unit" means a city, village, town, county, school district (as enumerated in s. 67.01 (5)), sewerage district, drainage district, and, without limitation because of enumeration, any other political subdivision of the state.

AB304-ASA1, s. 8 Section 8. 66.0137 (5) of the statutes is renumbered 66.0137 (5) (a) amended to read:

AB304-ASA1,8,2 66.0137 (5) (a) The state or a local governmental unit may provide for the payment of premiums for hospital, surgical and other health and accident insurance and life insurance for employees and officers and their spouses and dependent children. A local governmental unit may also provide for the payment of premiums for hospital and surgical care for its retired employees. In addition, a local governmental unit may, by ordinance or resolution, elect to offer to all of its employees a health care coverage plan through a program offered by the group insurance board under ch. 40. A local governmental unit that elects to participate under s. 40.51 (7) is subject to the applicable sections of ch. 40 instead of this subsection paragraph.

AB304-ASA1, s. 9 Section 9. 66.0137 (5) (b), (c) and (d) of the statutes are created to read:

AB304-ASA1,8,7 66.0137 (5) (b) If a local governmental unit solicits bids to provide health care coverage under par. (a), the local governmental unit shall use the uniform local governmental health care coverage request-for-proposals form developed by the commissioner of insurance under s. 601.41 (10) to solicit the bids.

AB304-ASA1,8,13 (c) A local governmental unit shall submit information about a bid it receives to the department of electronic government in the format specified under s. 22.07 (10) no later than 30 days after the bid is received or, in the case of a sealed bid, no later than 30 days after the bid is opened. Except as provided in par. (d), at the time the information is submitted to the department of electronic government, the local governmental unit shall do at least one of the following:

AB304-ASA1,8,14 1. Post the same information on the local government's Internet site, if any.

AB304-ASA1,8,17 2. Post notice on the local government's Internet site, if any, that the information has been submitted to the department of electronic government and will be available on the state's Internet site, if any.

AB304-ASA1,8,21 3. Post or publish as a class 1 notice under ch. 985 a statement that the information has been submitted to the department of electronic government and will be available on the state's Internet site, if any, or a statement that the information may be viewed at a specified location in the local governmental unit, or both.

AB304-ASA1,8,23 (d) Paragraph (c) does not apply to a local governmental unit that has fewer than 50 employees.

AB304-ASA1, s. 10 Section 10. 111.70 (1) (a) of the statutes is amended to read:

AB304-ASA1,9,23 111.70 (1) (a) "Collective bargaining" means the performance of the mutual obligation of a municipal employer, through its officers and agents, and the representative of its municipal employees in a collective bargaining unit, to meet and confer at reasonable times, in good faith, with the intention of reaching an agreement, or to resolve questions arising under such an agreement, with respect to wages, hours and conditions of employment, and with respect to a requirement of the municipal employer for a municipal employee to perform law enforcement and fire fighting services under s. 61.66, except as provided in sub. (4) (m) , (n), and (o) and s. 40.81 (3) and except that a municipal employer shall not meet and confer with respect to any proposal to diminish or abridge the rights guaranteed to municipal employees under ch. 164. The duty to bargain, however, does not compel either party to agree to a proposal or require the making of a concession. Collective bargaining includes the reduction of any agreement reached to a written and signed document. The municipal employer shall not be required to bargain on subjects reserved to management and direction of the governmental unit except insofar as the manner of exercise of such functions affects the wages, hours and conditions of employment of the municipal employees in a collective bargaining unit. In creating this subchapter the legislature recognizes that the municipal employer must exercise its powers and responsibilities to act for the government and good order of the jurisdiction which it serves, its commercial benefit and the health, safety and welfare of the public to assure orderly operations and functions within its jurisdiction, subject to those rights secured to municipal employees by the constitutions of this state and of the United States and by this subchapter.

AB304-ASA1, s. 11 Section 11. 111.70 (4) (c) 2m. of the statutes is created to read:

AB304-ASA1,10,8 111.70 (4) (c) 2m. `Factors used in arbitration to settle disputes.' If the parties to a dispute agree to have the commission or any other appropriate agency serve as arbitrator to resolve the dispute and if the commission or any other appropriate agency compares the wages, hours, and conditions of employment of the municipal employees involved in the arbitration proceedings with the wages, hours, and conditions of employment of any other employees, the commission or other appropriate agency shall compare the wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB304-ASA1, s. 12 Section 12. 111.70 (4) (cm) 7r. d. of the statutes is amended to read:

AB304-ASA1,10,14 111.70 (4) (cm) 7r. d. Comparison of wages, hours and conditions of employment of the municipal employees involved in the arbitration proceedings with the wages, hours and conditions of employment of other employees performing similar services. In making this comparison, the arbitrator or arbitration panel shall consider wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB304-ASA1, s. 13 Section 13. 111.70 (4) (cm) 7r. e. of the statutes is amended to read:

AB304-ASA1,10,21 111.70 (4) (cm) 7r. e. Comparison of the wages, hours and conditions of employment of the municipal employees involved in the arbitration proceedings with the wages, hours and conditions of employment of other employees generally in public employment in the same community and in comparable communities. In making this comparison, the arbitrator or arbitration panel shall consider wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB304-ASA1, s. 14 Section 14. 111.70 (4) (cm) 7r. f. of the statutes is amended to read:

AB304-ASA1,11,3 111.70 (4) (cm) 7r. f. Comparison of the wages, hours and conditions of employment of the municipal employees involved in the arbitration proceedings with the wages, hours and conditions of employment of other employees in private employment in the same community and in comparable communities. In making this comparison, the arbitrator or arbitration panel shall consider wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB304-ASA1, s. 15 Section 15. 111.70 (4) (cm) 7r. g. of the statutes is amended to read:

AB304-ASA1,11,7 111.70 (4) (cm) 7r. g. The average consumer prices for goods and services, commonly known as the cost of living, including specifically average housing costs and other costs significantly affecting the quality of life.

AB304-ASA1, s. 16 Section 16. 111.70 (4) (cm) 7r. h. of the statutes is amended to read:

AB304-ASA1,11,14 111.70 (4) (cm) 7r. h. The overall compensation presently received by the municipal employees, including direct wage compensation, vacation, holidays and excused time, insurance and pensions, medical and hospitalization benefits, the continuity and stability of employment, and all other benefits received. In making this comparison, the arbitrator or arbitration panel shall consider wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB304-ASA1, s. 17 Section 17. 111.70 (4) (jm) 4m. of the statutes is created to read:

AB304-ASA1,11,21 111.70 (4) (jm) 4m. For the purpose of setting wages and determining hours and conditions of employment under subd. 4., if the arbitrator compares the wages, hours, and conditions of employment with the wages, hours, and conditions of employment of other employees performing similar services or in the same community or comparable communities, the arbitrator shall consider wages, hours, and conditions of employment as a whole, rather than as individual elements.

AB304-ASA1, s. 18 Section 18. 111.70 (4) (n) of the statutes is created to read:

AB304-ASA1,12,9 111.70 (4) (n) Municipal employer-initiated change in health care coverage plan provider. 1. Notwithstanding the terms of a collective bargaining agreement, a municipal employer may unilaterally change its employees' health care coverage plan provider without the consent of any affected employee in the collective bargaining unit if the benefits provided by the new health care coverage plan provider are substantially similar to those provided by the former health care coverage plan provider and if the persons who provide health care coverage under the new plan are the same as under the former plan. Any such unilateral change in health care coverage plan provider is not a violation of a collective bargaining agreement or a prohibited practice under sub. (3) (a) and, for purposes of a qualified economic offer, satisfies the requirement to maintain fringe benefits under sub. (1) (nc).

AB304-ASA1,12,16 2. A municipal employer shall use 50% of the net savings that accrue to the municipal employer as a result of a change in health care coverage plan provider under subd. 1. to increase the wages paid to the affected municipal employees and to pay wage-related costs incurred by the municipal employer for those municipal employees during the 12-month period following the effective date of the change. The payment of any such increase in wages and wage-related costs by the municipal employer is not a prohibited practice under sub. (3) (a).