Assigned to ED                                                                                                                  FOR COMMITTEE

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

FACT SHEET FOR S.B. 1200

 

school employees; health insurance

 

Purpose

 

            Allows a school district governing board to offer insurance programs to school district associations.  Expands the uses of self-insurance program trusts that the school district governing board may offer to school districts.

 

Background

 

            Under current law, a school district governing board may offer self-insurance programs to school districts that place all funds into a trust to be used for payment of uninsured losses, claims, defense costs and other related expenses. 

           

The Attorney General concluded in 1985 in a formal opinion that the language in ARS section 15-382 did not authorize the trust to pay for premiums for nontrust insurance programs.  The term “other related expenses” relates to expenses similar to the expense of a particular loss or claim.  It does not include the cost of premiums for a completely different insurance program. 

 

Additionally, the Attorney General concluded in a separate formal opinion in 1985 that the trust could not pay for preventive wellness programs because they are not related to uninsured losses, claims or defense costs associated with workers’ compensation benefits to be authorized under ARS section 15-382.  The Attorney General stated that “other related expenses” means akin to, or allied with, uninsured losses, claims and defense costs.

 

S.B. 1200 expands the programs that can be offered under the self-insured pools to include nontrust insurance programs, such as wellness programs.

           

Provisions

 

1.      Allows a school district governing board to contract with trustees or boards of trustees to offer insurance programs to associations of school districts within the state.

 

2.      Clarifies that a school district governing board may establish a self-insurance program alone or with another school district.  Allows a school district governing board to establish a self-insurance program with an association of school districts.

 

3.      Expands the uses of self-insurance program trusts that the school district governing board may offer to school districts to include:

 

  1. costs of training designed to reduce losses and claims
  2. the cost of related employee benefits including wellness programs
  3. life
  4. disability and other fully and partially insured group insurance plans
  5. programs that allow for participation in a cafeteria plan
  6. costs of administration.

 

4.      Provides for a general effective date.

 

 

Prepared by Senate Staff

January 30, 2001