HB136 Alabama 2014 Session

Summary

Primary Sponsor

Mac McCutcheon

Republican

Session

Regular Session 2014

Title

Local Government Health Insurance Program, established, transfer from State Employees' Health Insurance Board

Summary

HB136 creates a Local Government Health Insurance Board to run the Local Government Health Insurance Program starting January 1, 2015, taking over from the State Employees' Insurance Board.

What This Bill Does

It establishes a new board to govern the program and transfers authority from SEIB on 1/1/2015. The program may be fully insured or self-insured, with the board setting premiums and applying cost-containment measures. Funding comes solely from employer participants (not the state), and eligible employer participants—including counties, municipalities, and other listed entities—may join to provide coverage for their employees, retirees, and dependents under board rules.

Who It Affects

• Full-time employees, elected officials, and retirees of employer participants (such as counties, municipalities, fire/water districts, and other listed entities) become eligible for health coverage and may have premiums deducted for themselves and their dependents.
• Employer participants (counties, municipalities, districts, and other listed organizations) must contribute funds to pay premiums and claims; they may join or withdraw from the program under set conditions.

Key Provisions

• Creates the Local Government Health Insurance Board and transfers governance and administration of the Local Government Health Insurance Program from SEIB to the new board, effective 12:01 a.m. January 1, 2015.
• Allows the board to establish either a fully insured or self-insured health care plan and to adopt rules for administration, including cost-containment measures such as deductibles, copayments, coinsurance, and wellness programs.
• Funding for the program comes exclusively from employer participants; the state does not provide funding, but participating entities may appropriate funds to cover premiums and administration.
• Automatically covered participants include all current SEIB employer participants; other entities (counties, municipalities, districts, associations, and certain organizations) may elect to participate by meeting criteria and following board rules.
• Withdrawal by a participating employer is allowed with six months' notice; they must pay claims incurred prior to withdrawal and may incur interest on past-due amounts after withdrawal; providers may be restricted from serving withdrawing entities for two years.
• The board sets eligibility, premiums, and rules for coverage of spouses and dependents; premiums for employees, retirees, and dependents are determined by the board and may be paid by the employer participant.
• Board composition includes nine members (3 municipal reps, 3 county reps, 1 retired employee, 2 active employees) with terms and a process for appointments/elections; initial terms are staggered for continuity.
• The board must solicit competitive proposals before contracting with carriers or third-party administrators and may award contracts to the most qualified bidder, considering cost and coverage factors.
• Claims denial notices must include reasons, with a 60-day window for an appeal to the claims administrator; final decision can be appealed in the Circuit Court of Montgomery County.
• The board maintains financial records, may hire a CPA for annual audits, and audits are open for public inspection; the act repeals conflicting laws and becomes effective immediately upon governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Counties