School District Optional Benefits

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This information is a follow-up to the ongoing discussion and implementation of school district optional benefit offerings

HB 2458 passed during the 2020 legislative session. This legislation has the following key points:

  • Prohibits school districts from offering any form of basic or optional benefits that compete with the benefits offered by the SEB Board or under the authority of HCA.
  • Delineates optional benefits school districts may offer if not otherwise offered by the SEB Board. Benefits must be voluntary and employee-paid (school district VEBA may continue to be funded by employers).
  • Authorizes the Board to study and offer (subject to funding) the same delineated benefits.
  • Requires school districts, carriers, and HCA to work together to modify, remove, or discontinue any district-based benefit that compete with a SEB Board or HCA offered benefit.

The legislature delineated the following benefits that a school district can offer, unless the SEB Board studies and offers the benefit:

  • Emergency transportation;
  • Identity protection;
  • Legal aid;
  • Long-term care insurance;
  • Noncommercial personal automobile insurance;
  • Personal homeowner’s or renter’s insurance;
  • Pet insurance;
  • Specific disease, illness-triggered, hospital confinement, or other fixed payment insurance;
  • Travel insurance; and
  • Voluntary employees’ beneficiary association (VEBA) accounts

As we look ahead to the next school year, HCA wants to provide some guidance on school districts’ optional benefits.  HCA recently recommended that the SEB Board not begin any evaluation of the 10 benefits in HB 2458 (listed above) until at least the Board’s 2021 meeting season.  Even under the most aggressive implementation timelines possible, any new offerings of the 10 benefits listed above would not be ready for school employees to elect until the Fall 2022 annual open enrollment and go live until the 2023 plan year.  Thus, you should rest assured a school district will have the ability to offer all of these 10 benefits for at least the  ’20-’21 and ’21-’22 school years. 

The following benefits are currently offered by either the SEB Board or HCA, and as such cannot be offered by school districts:

  • Medical (including pharmacy)
  • Dental
  • Vision
  • Life
  • Accidental Death & Dismemberment
  • Disability
  • Flexible Spending Account
  • Dependent Care Account
  • Health Savings Account

Any form of these benefits cannot be offered by school districts, regardless of the construction of the policy or the variation (i.e. short term disability, term life insurance, limited FSA, etc.) of the benefit offered by the SEB Board or HCA.

Additionally, we are aware that there are riders or provisions to policies that compete with some of the SEB Board and HCA offered benefits. We have seen some examples of these, specifically when it comes to personal automobile insurance, where accidental death & dismemberment riders are included. These types of riders and provisions should be removed from any policy that is offered by a school district.

We recognize that making revisions to existing policies to remove riders will take some time. With that said, we are hopeful that most policy riders and provisions will be able to be revised for offerings related to the 2020-2021 school year, but we are fully aware of the requirement for a carrier to file new policy documents and get approval from the Office of the Insurance Commissioner.   For benefits you offer with a few small riders or provisions that conflict with SEBB Program benefits, HCA appreciates you and your carrier’s good faith efforts in diligently working on the revisions and filings needed to remove conflicting rider benefits as soon as possible and that might not be until the 2021-2022 school year in some instances.

Again, we appreciate your engagement with us on this matter. HCA’s wishes to continue gathering information and insights from you as we continue to develop the benefit offerings for the SEBB Program.

Should you have any questions regarding this matter, please feel free to reach out to Cade Walker (