Authority: § 2.1-20.1, Code of Virginia.

A. The amounts for Medical/Hospitalization Benefits - State are from all funds appropriated to state agencies for this purpose. It is an internal service fund for appropriation purposes in Central Appropriations. Revenues will be paid from state agencies to the Department of Personnel and Training.

B. The amounts for Medical/Hospitalization Benefits - Local include estimated revenues received from localities for the local option program.

C. The Department of Planning and Budget shall effect such transfers from this appropriation to the Department of Personnel and Training as are required for the payment of medical/hospitalization benefits.

D.1. In the event that the total of all eligible claims exceeds the balance in the employee medical reimbursement account, there is hereby appropriated a sum sufficient from the general fund of the state treasury to enable the payment of such eligible claims.

2. The term "employee medical reimbursement account" means the account administered by the Department of Personnel and Training pursuant to § 125 of the Internal Revenue Code in connection with the health insurance program for state employees (§ 2.1-20.1 of the Code of Virginia).

E.1. Out of this amounts for Personnel Management Services, $15,121,803 the first year and $15,121,803 $20,811,374 the second year shall be transferred to state agencies and institutions of higher education to effect changes in the employer's share of premiums paid for the Commonwealth's health benefit plans. Costs associated with the increases for employees of Educational and General programs at institutions of higher education shall be borne by the general fund.

2. Except as provided for in paragraph E 1 above, agencies supported in whole or in part by nongeneral funds shall pay the proportionate share of the increase in the employer's share of the premiums, subject to the rules and regulations prescribed by the appointing or governing authority. Such nongeneral fund revenues and balances are hereby appropriated for this purpose, subject to the provisions of § 4-2.01 b of this act.

F. The Department of Personnel and Training shall continue until June 30, 1999, the surcharge on the employer share of premiums paid for health benefits coverage that went into effect on May 1, 1997. The surcharge applies to the Commonwealth's non-Medicare, self-insured health benefits plans.

G. 1. On July 1, 1998, the State Comptroller shall unreserve the $21,800,000 in the Payroll Reserve Fund and shall transfer $9,220,000 into the Employee Health Insurance Fund to be accounted for as a reserve component of this Fund. The $9,220,000 represents the general fund share of the reserve. Also, on July 1, 1998, the State Comptroller shall withhold from nongeneral fund agencies, and deposit into the Employee Health Insurance Fund, an amount estimated at $10,000,000 through surcharges or other measures consistent with generally accepted accounting principles. This amount represents the nongeneral fund cost for the funding the reserve component. The Department of Planning and Budget shall derive agency nongeneral fund costs based on nongeneral fund health insurance premium payments for fiscal year 1997.

2. No amounts shall be obligated or expended from the reserved component of this Fund unless prior approval is obtained from the Secretary of Finance and the Secretary of Administration. The Department of Planning and Budget shall notify the Chairmen of the House Appropriations and Senate Finance Committees of any disbursements made from or commitments against the reserved component.