Assigned to ED                                                                                       FOR CAUCUS & FLOOR ACTION

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

CORRECTED

FACT SHEET FOR S.B. 1200

 

school employees; health insurance

 

Purpose

 

            Allows a school district governing board to provide self-insurance programs to school district associations.  Expands the programs that self-insurance program trusts 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.

           

Provisions

 

1.      Allows a school district governing board to contract with trustees or boards of trustees to offer self-insurance programs to associations of school districts funded by member school districts and to establish a self-insurance program trust for the payment of funds.

 

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

3.      Expands the programs that self-insurance program trusts may offer to school districts to include:

 

  1. costs of training designed to reduce losses and claims
  2. the cost of employee benefits including wellness programs
  3. life
  4. disability and other insured group insurance plans
  5. cafeteria plans meeting the requirements of the U.S. Internal Revenue Code of 1996
  6. costs of administration

 

4.      Provides for a general effective date

 

Senate Action

 

ED                   2/1/01              DP       7-0-1-0

 

 

Prepared by Senate Staff

February 7, 2001