1. A. The Legislature shall annually appropriate adequate funding to the State Board of Education and the State Board of Vocational and Technical Education for the purpose of providing a flexible benefit allowance to school district employees pursuant to this act. The funding shall be based on the number of eligible school district employees employed by a school district which is participating in the health insurance plan offered by the State and Education Employees Group Insurance Board or is self-insured as counted on May 1st of each year. Each board shall disburse the flexible benefit allowance funds in appropriate amounts to school districts.
2. B. Every school district shall establish, or make available to school district employees a cafeteria plan pursuant to 26 U.S. C. Section 125 of the United States Code. The plan shall offer, as a benefit, major medical health care plan coverage.
3. C. The flexible benefit allowance amount established pursuant to Section 26-105 of this title shall be credited to each eligible school district employee. School district employees shall elect whether to use the flexible benefit allowance to pay for coverage in the health insurance plan offered by the State and Education Employees Group Insurance Board or the self-insured plan as offered by the school district, or to receive the flexible benefit allowance as taxable compensation.
4. D. The administrator of the cafeteria plan shall maintain a separate account for each participating school district employee. School districts shall forward the school district employee flexible benefit allowance amounts to the administrator for elected purchases of cafeteria plan benefits.

5. E. Expenses included in an employee's salary adjustment agreement pursuant to the cafeteria plan shall be limited to expenses for:

   1. 1. Premiums for any health insurance, health maintenance organization, life insurance, long term disability insurance, dental insurance or high deductible health benefit plan offered to employees and their dependents; and
   2. 2. All other eligible benefit programs offered under 26 U.S.C. Section 125 of the United States Code.
6. F. The flexible benefit allowance shall not be included as income in computation of state retirement contributions and benefits or as part of the Minimum Salary Schedule for teachers established in Section 11-114.7 of this title. School districts shall not consider the flexible benefit allowance amount as income for eligible support employees and thereby shall not reduce the salary of an eligible support employee.

Laws 1998, SB 902, c. 380, § 6, emerg. eff. June 9, 1998; Amended by Laws 1999, HB 1363, c. 334, § 2, emerg. eff. July 1, 1999 (superseded document available).