As Amended
SEC. 25-11-143. Health insurance plan for current and future retirees; definition of "retiree"; coverage; alternatives for those declining coverage; subsidy; employer contribution; late charges and interest penalties; powers and duties of the board.
[Effective from and after July 1 of the year following the year in which the board determines and the board's actuary certifies that the employer's contribution rate to the Public Employees' Retirement System can be reduced by 1% without causing the unfunded accrued actuarial liability amortization period for the retirement system to exceed 20 years, this section shall read as follows:]
(1) This provision of this section shall become effective from and after July 1 of the year following the year in which the board determines and the board's actuary certifies that the employer's contribution rate to the Public Employees' Retirement System can be reduced by one percent (1%) without causing the unfunded accrued actuarial liability amortization period for the retirement system to exceed twenty (20) years.
(2) As used in this section, the term "retiree" means any person receiving a service or disability retirement benefit from any system administered by the board; however, in the case of persons participating in the optional retirement plan established in Section 25-11-401 et seq., the term "retiree" includes only those persons who would be entitled to receive a retirement allowance under the provisions of Section 25-11-111 if they were not members of the optional retirement plan.
(3) The board shall design a plan of health insurance for all current and future retirees that will take effect from and after January 1 following the year in which this section becomes effective as provided in subsection (1) of this section. The plan may include coverage for the spouse, surviving beneficiary and dependent children of retirees and other such sponsored dependents as the board considers appropriate; however, the subsidy provided for in this section shall apply only to the cost of providing coverage to retirees. Initially, the plan shall have benefits equivalent to those in the State and School Employees Health Insurance Plan established in Section 25-15-9; however, the board may modify the plan as necessary to meet the needs of the members of the plan and to maintain the fiscal soundness of the plan. The board may offer an optional plan to retirees who are eligible for Medicare, and any additional cost of that plan shall be paid by the retiree electing that optional coverage.
(4) (a) Retirees may decline coverage in the plan established by this section, but they may be included in the plan later if they apply for coverage during any open enrollment periods that may be established by the board and can show, by evidence considered sufficient to the board, that they were covered by health insurance during the period of time that they were not covered by the plan established by this section. The board may adjust the amount of the subsidy for those persons and may limit the number of times retirees who decline coverage who may be later included in the plan.
(b) The board shall determine the manner in which persons who elect continuation coverage under the federal Consolidated Omnibus Budget Reconciliation Act of 1987 (COBRA) will be treated regarding their eligibility for coverage under the plan established under this section and the amount of the subsidy for those persons.
(5) From and after January 1 following the year in which this section becomes effective as provided in subsection (1) of this section, the board shall subsidize a portion of the cost of providing the plan of health insurance to retirees. The amount of the subsidy provided for each retiree shall be equal to a percentage of the annual cost of providing coverage under the plan to the retiree as determined by the board. Except as otherwise provided in this section, the percentage amount of the subsidy shall be two percent (2%) for each year of creditable service, less any fronted service for age-limited disability benefits of the retiree up to a maximum of sixty percent (60%). Once the percentage amount of the subsidy has been determined under this subsection, it may not be changed unless the retiree returns to membership service and earns additional years of creditable service or elects not to be enrolled in the plan for a period of time.
(6) The amount of the subsidy for each disability retiree shall be calculated in the same manner as other retirees. For purposes of determining the amount that a disability retiree must pay above the subsidy for coverage under the plan, the cost of coverage for disability retirees shall be deemed to be the average cost of providing coverage for other retirees as determined by the board.
(7) Each retiree participating in the plan, by written authorization, shall instruct the board to deduct from the retirement allowance the portion of the premium that is not subsidized. The amounts so deducted shall be handled by the board in the manner provided for in subsection (9) of this section.
(8) From and after July 1 of the year in which this section becomes effective as provided in subsection (1) of this section, each employer shall pay monthly to the board an amount equal to two and one-half percent (2.5%) of the total payroll of the employer on which retirement contributions are made under retirement plans administered by the Public Employees' Retirement System.
(9) The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all contributions required under this section. After appropriation for administration expenses of the program, all funds received by the board under this section shall be held in a fund in the custody of the board. All those funds held by the board shall be utilized for the purpose of subsidizing the health insurance plan required to be established by this section, and shall be invested as provided in Section 2 of this act.
(10) The board:
(a) Shall administer the plan;
(b) Shall have the sole authority to promulgate rules and regulations governing the plan, and shall be vested with all legal authority necessary and proper to perform this function including, but not limited to, defining the benefits provided by the plan, requesting and accepting bids for services, establishing premium rates and receiving premium payments;
(c) May enter into contracts with accountants, actuaries and other persons whose skills are necessary to carry out the provisions of this section; and
(d) Is authorized to procure legal services if it deems these services necessary to carry out its responsibilities under this section.
SOURCES: Laws, 2002, ch. 636, § 1, HB 1386, eff from and after July 1, 2002.