An Act relating to insurance; concerning state officers and employees; certain medical conditions to be covered notwithstanding ERISA; providing offer of long-term care insurance; amending K.S.A. 40-2,105 and 75-6513 and repealing the existing sections.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 40-2,105 is hereby amended to read as follows: 40- 2,105. (a) On or after the effective date of this act, every insurer which issues any individual or group policy of accident and sickness insurance providing medical, surgical or hospital expense coverage for other than specific diseases or accidents only and which provides for reimbursement or indemnity for services rendered to a person covered by such policy in a medical care facility, must provide for reimbursement or indemnity under such individual policy or under such group policy, except as pro- vided in subsection (d), which shall be limited to not less than 30 days per year when such person is confined for treatment of alcoholism, drug abuse or nervous or mental conditions in a medical care facility licensed under the provisions of K.S.A. 65-429 and amendments thereto, a treat- ment facility for alcoholics licensed under the provisions of K.S.A. 65- 4014 and amendments thereto, a treatment facility for drug abusers li- censed under the provisions of K.S.A. 65-4605 and amendments thereto, a community mental health center or clinic licensed under the provisions of K.S.A. 75-3307b and amendments thereto or a psychiatric hospital licensed under the provisions of K.S.A. 75-3307b and amendments thereto. Such individual policy or such group policy shall also provide for reimbursement or indemnity, except as provided in subsection (d), of the costs of treatment of such person for alcoholism, drug abuse and nervous or mental conditions, limited to not less than 100% of the first $100, 80% of the next $100 and 50% of the next $1,640 in any year and limited to not less than $7,500 in such person's lifetime, in the facilities enumerated when confinement is not necessary for the treatment or by a physician licensed or psychologist licensed to practice under the laws of the state of Kansas.

(b) For the purposes of this section ``nervous or mental conditions'' means disorders specified in the diagnostic and statistical manual of men- tal disorders, third fourth edition, (DSM-III, 1980) (DSM-IV, 1994) of the American psychiatric association but shall not include conditions not attributable to a mental disorder that are a focus of attention or treatment (DSM-III, V Codes) (DSM-IV, 1994).

(c) The provisions of this section shall be applicable to health main- tenance organizations organized under article 32 of chapter 40 of the Kansas Statutes Annotated.

(d) There shall be no coverage under the provisions of this section for any assessment against any person required by a diversion agreement or by order of a court to attend an alcohol and drug safety action program certified pursuant to K.S.A. 8-1008 and amendments thereto.

(e) The provisions of this section shall not apply to any medicare supplement policy of insurance, as defined by the commissioner of in- surance by rule and regulation.

(f) The provisions of this section shall be applicable to the Kansas state employees health care benefits program developed and provided by the Kansas state employees health care commission.

New Sec. 2. As used in sections 2 through 4 of this act:

(a) ``Commission'' means the Kansas state employees health care commission established pursuant to K.S.A. 75-6502, and amendments thereto.

(b) ``Director'' means the director of accounts and reports.

(c) ``Employee'' means any person who is an elected or appointed officer or any employee of the state in the classified service or unclassified service under the Kansas civil service act, other than persons who are employed on a seasonal or temporary basis.

(d) ``Long-term care insurance'' means any long-term care insurance policy which is authorized to be sold in the state of Kansas.

(e) ``State'' means the state of Kansas and any state agency as defined in subsection (3) of K.S.A. 75-3701, and amendments thereto.

New Sec. 3. (a) The Kansas state employees health care commission shall offer to all employees long-term care insurance and the commission may enter into one or more group insurance contracts to provide such long-term care insurance.

(b) The Kansas state employees health care commission is hereby authorized to negotiate and enter into contracts with qualified insurers for the purpose of providing long-term care insurance. The commission shall advertise for proposals, shall negotiate with not less than three firms or other parties submitting proposals, and shall select from among those submitting proposals the firm or other contracting party to contract with for the purpose of entering into contracts for long-term care insurance.

(c) The provisions of K.S.A. 75-4317 to 75-4320a, inclusive, and amendments thereto, shall not apply to meetings of the Kansas state em- ployees health care commission when the commission meets solely for the purpose of discussing and preparing strategies for negotiations for contracts for long-term care insurance.

(d) Contracts entered into pursuant to this section shall not be subject to the provisions of K.S.A. 75-3738 to 75-3740, inclusive, and amend- ments thereto. Such contracts may be for terms of not more than three years and may be renegotiated and renewed. All such contracts shall be subject to the limits of appropriations made or available therefor and subject to the provisions of appropriations acts relating thereto.

(e) In exercising and performing the powers, duties and functions prescribed by this section, the Kansas state employees health care com- mission may adopt rules and regulations and enter into such contracts as may be necessary.

New Sec. 4. (a) The purchase of long-term care insurance by an em- ployee shall be voluntary, and the cost of such insurance shall be paid by the employee. The cost of such insurance for such employee shall be established by the Kansas state employees health care commission.

(b) Periodic deductions from state payrolls may be made in accor- dance with procedures prescribed by the secretary of administration to cover the costs of the long-term care insurance payable employees. All moneys deducted pursuant to this section shall be remitted to the com- mission and deposited in the cafeteria benefits fund in the manner pro- vided by K.S.A. 75-6513, and amendments thereto.

Sec. 5. K.S.A. 75-6513 is hereby amended to read as follows: 75- 6513. (a) The health care benefits program fund is hereby abolished and any reference to the health care benefits program fund in any statute, contract or other document shall be deemed to be a reference to the cafeteria benefits fund established by this section. There is hereby created in the state treasury the cafeteria benefits fund. On the effective date of this act, the director of accounts and reports shall transfer all moneys in the health care benefits program fund to the cafeteria benefits fund and all liabilities of the health care benefits program fund are hereby trans- ferred to and imposed upon the cafeteria benefits fund.

(b) The cost of the state health care benefits program, including the costs of administering the program, shall be paid from this the cafeteria benefits fund. The cost of the long-term care insurance, including the costs of administration, purchased pursuant to section 4 shall be paid from the cafeteria benefits fund. The Kansas state employees health care commis- sion shall remit all moneys received by or for the commission pursuant to the state health care benefits program or from the purchase of long- term care insurance to the state treasurer. Upon receipt of such remit- tance the state treasurer shall deposit the entire amount thereof in the state treasury to the credit of the cafeteria benefits fund.

(c) Each state agency shall pay into the cafeteria benefits fund amounts specified by the secretary of administration to pay for costs of administering the cafeteria plan as provided by law, including the costs of benefits provided thereunder.

(d) All expenditures from the cafeteria benefits fund shall be made in accordance with appropriation acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by: (1) The chairperson of the Kansas state employees health care commission or by a person or persons designated by the chairperson, for expenditures re- lating to the health care benefits program,; and (2) the secretary of ad- ministration or by a person or persons designated by the secretary, for expenditures relating to administering the cafeteria plan as provided by law, including the costs of benefits provided thereunder. The director of accounts and reports shall issue warrants pursuant to vouchers approved under this section for payments from the cafeteria benefits fund notwith- standing the fact that claims for such payments were not submitted or processed for payment from money appropriated for the fiscal year in which the fund first became liable to make such payments.

Sec. 6. K.S.A. 40-2,105 and 75-6513 are hereby repealed.

Sec. 7. This act shall take effect and be in force from and after its publication in the statute book.

Approved April 14, 1996.