(a) The Board, with the approval of the Governor and the Legislature, is hereby authorized and directed to establish a health insurance plan which may be self-funded, for Government officers and employees and their dependents which, subject to the conditions and limitations contained in this subchapter, and in the rules and regulations of the Board, will provide for group hospitalization, surgical, dental, and medical insurance against the financial costs of hospitalization, surgery, dental and medical treatment and care, disability and death benefits; and may include, among other things, prescribed drugs, medicines, prosthetic appliances, hospital inpatient and outpatient service benefits and dental and medical expense indemnity benefits.
(b) Such health insurance shall not include expenses incurred by or on account of an individual prior to the effective date of the plan as to him; eye glasses, hearing aids and examinations for the prescription of the fitting thereto, except for a voluntary benefit program; cosmetic surgery or treatment except to the extent necessary for the correction of damage caused by accidental injury while covered by the plan or as direct result of the diseases covered by the plan; services received because of illness or injury arising out of or in the course of employment and entitling the individual to benefit under a worker's compensation administration or occupational disease law; services received in a hospital owned or operated by the United States Government for which no charge is made; services received for injury or sickness due to war or any act of war whether declared, or undeclared, which war or act shall have occurred after the effective date of this plan; expenses for which the individual is not required to make payment; expenses to the extent of benefits provided under any employer group plan other than this plan, and such other expenses as may be excluded by regulations of the Board.
(c) The health insurance plan shall be designed by the Board (1) to provide a reasonable relationship between the hospital, surgical, dental, and medical benefits to be included, and the expected distribution of expenses of each such type to be incurred by the covered employees and dependents, and (2) to include reasonable controls, which may include deductible and coinsurance provisions applicable to some or all of the benefits to reduce unnecessary utilization of the various hospital, surgical, dental, and medical services to be provided and to provide reasonable assurance of stability in future years of the plan, and (3) to provide benefits on a nondiscriminatory basis to the extent possible, to active members.