A BILL TO BE ENTITLED
AN ACT to establish a statewide State employee benefit committee to evaluate and provide a menu of portable supplemental benefits for all state employees, as recommended by the governor's commission to promote government efficiency and savings on state spending.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑31‑60 reads as rewritten:
"§ 58‑31‑60.  Payroll deduction insurance products paid for by State employees.
(a)	State Employee Benefit Committee. – The Department of Administration shall establish a State Employee Benefit Committee (hereinafter "Committee") for the following purposes:
(1)	To review insurance products currently offered through payroll deduction to  all State employees to determine if those products meet the needs and desires of  State employees.
(2)	To select the types of insurance products that reflect the needs and desires of  all State employees.
(3)	To competitively select the best insurance  products.
As used in this section, "insurance product" includes a prepaid legal services plan registered under G.S. 84‑23.1.
(b)	Appointment of State Employee Benefit Committee. – The Governor shall appoint the members of the State Employee Benefit Committee. The Committee shall consist of not less than five or more than nine individuals a majority of whom have been employed by the State for at least one year. The committee members shall, except where necessary initially to establish the rotation herein prescribed, serve three‑year terms with approximately one‑third of the terms expiring annually. Committee membership make‑up shall fairly represent the work force and be selected without regard to any political or other affiliations. It shall be the duty of the Department of Administration to assure that the Committee is completely autonomous in its selection of insurance products and insurance companies and that no member of the Committee has any conflict of interest in serving on the Committee. Any decision rendered by the Committee where the autonomy of the Committee or a conflict of interest is questioned shall be subject to appeal pursuant to the Administrative Procedure  Act.
(c)	Payroll Deduction Slots. – Each payroll unit shall be entitled to not less than four payroll deduction slots to be used for payment of insurance premiums for products selected by the Committee and offered to the employees of the payroll unit. The Committee shall select only one company per payroll deduction slot. The Company selected by the Committee shall be permitted to sell through payroll deduction only the products specifically approved by the Committee. The assignment by the Committee of a payroll deduction slot shall be for a period of not less than two years unless the insurance company shall be in violation of the terms of the written agreement specified in this subsection. The insurance company awarded a payroll deduction slot shall, pursuant to a written agreement setting out the rights and duties of the insurance company, be afforded an adequate opportunity to solicit employees of the payroll unit by making such employees aware that a representative of the company will be available at a specified time and at a location convenient to the employees.
Notwithstanding any other provision of the General Statutes, once an employee has selected an insurance product for payroll deduction, that product may not be removed from payroll deduction for that employee without his or her specific written consent.
 When an employee retires from State employment and payroll deduction under this section is no longer available, the insurance company may not terminate life insurance products purchased under the payroll deduction plan without the retiree's specific written consent solely because the premium is no longer deducted from payroll.(c1)	Procedure for Selection of Insurance Product Proposals. – All insurance product proposals shall be sealed. The Committee shall open all proposals in public and record them in the minutes of the Committee, at which time the proposals become public records open to public inspection.
After the public opening, the Committee shall review the proposals, examining the cost and quality of the products, the reputation and capabilities of the insurance companies submitting the proposals, and other appropriate criteria. The Committee may reject any or all proposals.
A company may seek to modify or withdraw a proposal only after the public opening and only on the basis that the proposal contains an unintentional clerical error as opposed to an error in judgment. A company seeking to modify or withdraw a proposal shall submit to the Committee a written request, with facts and evidence in support of its position, prior to the award of the payroll deduction slot, but not later than two days after the public opening of the proposals. The Committee shall promptly review the request, examine the nature of the error, and determine whether to permit or deny the request.
(d)	Criminal Penalty. – It shall be a Class 3 misdemeanor for any State employee, who has supervisory authority over any member of the Committee, to attempt to influence the autonomy of any Committee either in the appointment of members to such Committee or in the operation of such Committee; or for anyone to open a sealed insurance product proposal or disclose or exhibit the contents of a sealed insurance product proposal, prior to the public opening of the proposal. The Commissioner of Insurance shall have the authority to investigate complaints alleging acts subject to the criminal penalty and shall report his findings to the Attorney General of North Carolina."
SECTION 2.  This act becomes effective July 1, 2004, and applies to the insurance coverage deductible year for State employees beginning with July 1, 2005.