Since the passage of SB 426 established the Oregon Educators Benefit Board, districts have been faced with the question of how opt-outs will be handled under the new statewide insurance pool. We are beginning to get some answers about how and when school employees may decline insurance benefits under OEBB.

OEBB has filed OAR 111-040-0050 for public comment. The public comment period closed May 30 and OEBB will soon vote on the permanent rule.

This OAR provides two mechanisms by which an employee may decline OEBB insurance coverage. The term "opting out of coverage" under the proposed rule means "an individual elects not to enroll in a medical plan and is eligible to receive a portion of the cash contribution or other type of remuneration as provided for under a collective bargaining agreement, formal district-wide policy, or employment contract." The meaning of "waiving benefits," on the other hand, is "an individual elects not to enroll in any of the benefit plans available under the OEBB-sponsored benefits program and is not eligible to receive any portion of a cash contribution or other type of remuneration."

Districts should review their collective bargaining agreements to determine if they still accurately denote whether or not an employee who declines coverage does so with a legitimate expectation of some alternative financial compensation.

Many district contracts use the term "opt-out" to refer to the employee declining coverage with no right or reasonable expectation of alternative financial compensation in lieu of the district's premium contribution amount. Under the proposed administrative rule, this use of "opt-out" is not accurate and should be replaced in the contract with the term "waiving benefits."

Some district bargaining agreements don't address declination of insurance benefits, which is no longer advisable in light of the proposed administrative rules.

Proposed OAR 111-040-0050 states:

"Unless otherwise specified in a collective bargaining agreement, formal district-wide policy or employment contract in effect on July 1, 2008, an eligible employee may opt out of the OEBB-sponsored medical benefit plans." (Emphasis added).

Districts now bargaining or preparing to bargain should draft proposal language specifying whether employees who decline coverage will or will not be entitled to alternative financial remuneration in lieu of the insurance benefit. Silence on the subject could be interpreted as the right to opt-out - meaning the employee would be entitled to a financial incentive in lieu of the insurance benefit.

OEBB’s benefit analyst team’s toll-free phone number is (888) 4MY-OEBB or (888) 469-6322. Additional information can be found on OEBB's Web site.