AN ACT relating to duty-related disability benefits.

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AN ACT relating to duty-related disability benefits. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 61.621 is amended to read as follows: 3
(1) Notwithstanding any provision of any statutes to the contrary, effective June 1, 4
2000, any employee participating in one (1) of the state -administered retirement 5
systems who is not in a haz ardous duty position, as defined in KRS 61.592 or 6
78.5520, shall be eligible for minimum benefits equal to the benefits payable under 7
this section or KRS 61.702 or 78.5536, as applicable, if the employee: 8
(a) Dies as a result of a duty-related injury;[ or] 9
(b) Becomes totally and permanently disabled to engage in any occupation for 10
remuneration or profit as a result of a duty-related injury; or 11
(c) Becomes disabled as a result of a duty -related injury as provided in 12
subsection (5)(c) of this section. 13
(2) As used in[(a) For purposes of] this section, "duty-related injury": 14
(a) Means: 15
1. a. A single traumatic event that occurs while the employee is 16
performing the duties of his or her position; or 17
b. A single act of violence committed against the employee that is 18
found to be related to his or her job duties, whether or not it occurs 19
at his or her job site; and 20
2. The event or act of violence produces a h armful change in the human 21
organism evidenced by objective medical findings; and[.] 22
(b) ["Duty-related injury" ] Does not include the effects of the natural aging 23
process, a communicable disease unless the risk of contracting the disease is 24
increased by nat ure of the employment, or a psychological, psychiatric, or 25
stress-related change in the human organism unless it is the direct result of a 26
physical injury. 27
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(3) (a) If the employee dies as a result of a duty -related injury and is survived by a 1
spouse, the surviving spouse shall be the beneficiary, and this shall supersede 2
the designation of all previous beneficiaries of the deceased employee's 3
retirement account, except as provided in KRS 61.542(2)(e). 4
(b) The surviving spouse, provided he or she supersedes all previously designated 5
beneficiaries, may elect to receive the benefits payable under KRS 61.640 or 6
other applicable death benefit statutes, or may elect to receive a lump -sum 7
payment of ten thousand dollars ($10,000) and a monthly payment equal to 8
seventy-five percent (75%) of the member's monthly average pay beginning 9
in the month following the member's death and continuing each month until 10
the death of the surviving spouse. 11
(c) In addition, if the member is also survived by dependent children, monthl y 12
payments shall be made for each dependent child equal to ten percent (10%) 13
of the deceased member's monthly average pay, except that the combined 14
maximum payment made to the: 15
1. Surviving spouse and dependent children under this subsection shall not 16
exceed one hundred percent (100%) of the deceased member's monthly 17
average pay; and 18
2. Dependent children, while the surviving spouse is living, shall not 19
exceed twenty -five percent (25%) of the deceased member's monthly 20
average pay. Payments made to the depe ndent children under this 21
subsection shall be divided equally among all the dependent children. 22
(4) If the employee dies as a result of a duty -related injury and is not survived by a 23
spouse but is survived by a dependent child or children, the following be nefits shall 24
be paid to the dependent child or children: 25
(a) Fifty percent (50%) of the deceased member's monthly average pay, if the 26
deceased member has one (1) dependent child; 27
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(b) Sixty-five percent (65%) of the deceased member's monthly average pay, if 1
the deceased member has two (2) dependent children; or 2
(c) Seventy-five percent (75%) of the deceased member's monthly average pay, if 3
the deceased member has three (3) or more dependent children. 4
Payments made to the dependent children under this subsec tion shall be divided 5
equally among all the dependent children. 6
(5) If the employee is determined to be disabled as provided in KRS 61.600, or other 7
applicable disability statutes in any other state -administered retirement system, as 8
the result of a duty -related injury, the employee may elect to receive benefits 9
determined under the provisions of KRS 61.605, or other applicable disability 10
statutes in any other state-administered retirement system, except that: 11
(a) If an employee is working in a nonhazardous position that could be certified 12
as a hazardous position based upon KRS 61.592 or 78.5520 and is totally and 13
permanently disabled to engage in any occupation for remuneration or 14
profit, the monthly retirement allowance shall not be less than seventy -five 15
percent (75%) of the employee's monthly average pay;[ or] 16
(b) If an employee is working in a nonhazardous position that could not be 17
certified as a hazardous position based upon KRS 61.592 or 78.5520 and is 18
totally and permanently disabled to engage in any occupation for 19
remuneration or profit , the monthly retirement allowance shall not be less 20
than twenty-five percent (25%) of the employee's monthly final rate of pay ; 21
or 22
(c) If an employee is working in a nonhazardous position that could be certified 23
as a hazardous position based upon KRS 61.592 or 78.5520 and is disabled 24
resulting in an incapacity to continue as an employee in the position that 25
could be certified as a hazardous position, but is not deemed to be totally 26
and permanently disabled to engage in any occupation for remuneration or 27
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profit, the monthly retirement allowance shall not be less than twenty -five 1
percent (25%) of the employee's monthly final rate of pay. 2
For purposes of determining a disability that is the result of a duty related injur y, 3
the service requirement in KRS 61.600(1)(a), or other applicable statutes in any 4
other state-administered retirement system, shall be waived. 5
(6) (a) In the period of time following the disability of a member covered by 6
subsection (5)(a) of this section during which dependent children survive, a 7
monthly payment shall be made for each dependent child who is alive which 8
shall be equal to ten percent (10%) of the disabled member's monthly average 9
pay, except that: 10
1. Member and dependent children payments under this section shall not 11
exceed one hundred percent (100%) of the member's monthly average 12
pay; and 13
2. Total maximum dependent children's ben efits shall not exceed twenty -14
five percent (25%) of the member's monthly average pay while the 15
member is living and forty percent (40%) of the disabled member's 16
monthly average pay after the member's death. The payment shall 17
commence in the month following the date of disability of the member 18
and shall be payable to the dependent children, or to a legally appointed 19
guardian, or as directed by the system and shall be divided equally 20
among all dependent children. 21
(b) In the period of time following the disabi lity of a member covered by 22
subsection (5)(b) or (c) of this section during which dependent children 23
survive, a monthly payment shall be made for each dependent child who is 24
alive which shall be equal to ten percent (10%) of the disabled member's 25
monthly f inal rate of pay; except that total maximum dependent children's 26
benefits shall not exceed forty percent (40%) of the disabled member's 27
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monthly final rate of pay at the time any particular payment is due. The 1
payment shall commence in the month following t he date of disability of the 2
member and shall be payable to the dependent children, or to a legally 3
appointed guardian, or as directed by the system. 4
(7) Benefits for death as a result of a duty -related injury to a dependent child shall be 5
payable under t his section notwithstanding an election by a surviving spouse or 6
beneficiary to withdraw the deceased member's accumulated account balance as 7
provided in KRS 61.625 or benefits under any other provisions of KRS 61.515 to 8
61.705 or other applicable death be nefit statutes in any other state -administered 9
retirement system. 10
(8) (a) A spouse applying for benefits under this section who is also eligible for 11
benefits under KRS 61.640 or 78.5532 may elect to receive benefits under 12
KRS 61.640(2)(a) or (b) or 78.5532 (2)(a) or (b) while the application for 13
benefits under this section is pending. 14
(b) If a final determination results in a finding of eligibility for benefits under this 15
section, the system shall recalculate the benefits due the spouse in accordance 16
with this subsection. 17
(c) If the spouse has been paid less than the amount of benefits to which the 18
spouse was entitled to receive under this section, the system shall pay the 19
additional funds due to the spouse. 20
(d) If the spouse has been paid more than the benef it the spouse was eligible to 21
receive under this section, then the system shall deduct the amount owed by 22
the spouse from the ten thousand dollars ($10,000) lump -sum payment and 23
from the monthly retirement allowance payments until the amount owed to 24
the systems has been recovered. 25
(9) As used in [For purposes of] this section, "dependent child" has the same meaning 26
as in KRS 16.505. 27
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(10) This section shall be known as "The Fred Capps Memorial Act." 1
Section 2. KRS 61.702 is amended to read as follows: 2
(1) As used in[For purposes of] this section: 3
(a) "Hospital and medical insurance plan" may include, at the board's discretion, 4
any one (1) or more of the following: 5
1. Any hospital and medical expense policy or certificate, pr ovider-6
sponsored integrated health delivery network, self -insured medical plan, 7
health maintenance organization contract, or other health benefit plan; 8
2. Any health savings account as permitted by 26 U.S.C. sec. 223 or health 9
reimbursement arrangement or a similar account as may be permitted by 10
26 U.S.C. sec. 105 or 106. Such arrangement or account, at the board's 11
discretion, may reimburse any medical expense permissible under 26 12
U.S.C. sec. 213; or 13
3. A medical insurance reimbursement program established by the board 14
through the promulgation of administrative regulation under which 15
members purchase individual health insurance coverage through a health 16
insurance exchange established under 42 U.S.C. sec. 18031 or 18041; 17
(b) "Monthly contribution rate" is the amount determined by the board based 18
upon the requirements of subsection (4)(a) to (d) of this section, except that 19
for members who began participating in the system on or after July 1, 2003, 20
the term shall mean the amount determined in subsection (4)(e) of this 21
section; and 22
(c) "Months of service" means the total months of combined service used to 23
determine benefits under the system, except service added to determine 24
disability benefits or service otherwise prohibited from being used to 25
determine retiree health benefits under KRS 16.505 to 16.652 or 61.510 to 26
61.705 shall not be counted as "months of service." For current and former 27
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employees of the Council on Postsecondary Education who were employed 1
prior to January 1, 1993, and who earn at least fifteen (15) years of service 2
credit in the Kentucky Employees Retirement System, "months of service" 3
shall also include vested service in another retirement system other than the 4
Kentucky Teachers' Retirement System sponsored by the Council on 5
Postsecondary Education. 6
(2) (a) 1. The board of trustees of the system shall arrange by appropriate contract 7
or on a self -insured basis to provide a group hospital and medical 8
insurance plan coverage for: 9
a. Present and future recipients of a retirement allowance from the 10
Kentucky Employees Retirement System and the State Police 11
Retirement System; and 12
b. The spouse and each qualified dependent of a recipient who is a 13
former member or the beneficiary, provided the spouse and 14
dependent meet the requirements to participate in the hospital and 15
medical insurance plans established, contracted, or authorized by 16
the system. 17
2. Any recipient who chooses coverage under a hospital and medical 18
insurance plan shall pay, by payroll deduction from the retirement 19
allowance, electronic fund s transfer, or by another method, the 20
difference between the premium cost of the hospital and medical 21
insurance plan coverage selected and the monthly contribution rate to 22
which he or she would be entitled under this section. 23
(b) 1. For present and future recipients of a retirement allowance from the 24
system who are not eligible for Medicare and for those recipients 25
described in subparagraph 3.b. of this paragraph, the board may 26
authorize these participants to be included in the Kentucky Employees 27
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Health Plan as provided by KRS 18A.225 to 18A.2287 and shall provide 1
benefits for recipients in the plan equal to those provided to state 2
employees having the same Medicare hospital and medical insurance 3
eligibility status. Notwithstanding the provisions of any othe r statute 4
except subparagraph 3.b. of this paragraph, system recipients shall be 5
included in the same class as current state employees for purposes of 6
determining medical insurance policies and premiums in the Kentucky 7
Employees Health Plan as provided by KRS 18A.225 to 18A.2287. 8
2. Regardless of age, if a recipient or the spouse or dependent child of a 9
recipient who elects coverage becomes eligible for Medicare, he or she 10
shall participate in the plans offered by the systems for Medicare 11
eligible recipients. Individuals participating in the Medicare eligible 12
plans may be required to obtain and pay for Medicare Part A and Part B 13
coverage, in order to participate in the Medicare eligible plans offered 14
by the system. 15
3. The system shall continue to provide the same hospital and medical 16
insurance plan coverage for recipients and qualifying dependents after 17
the age of sixty-five (65) as before the age of sixty-five (65), if: 18
a. The recipient is not eligible for Medicare coverage; or 19
b. The recipient would otherwise be eligible for Medicare coverage 20
but is subject to the Medicare Secondary Payer Act under 42 21
U.S.C. sec. 1395y(b) and has been reemployed by a participating 22
agency which offers the recipient a hospital and medical insurance 23
benefit or by a participating agency which is prevented from 24
offering a hospital and medical benefit to the recipient as a 25
condition of reemployment under KRS 70.293, 95.022, or 26
164.952. Individuals who are eligible, pursuant to this subdivision, 27
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to be included in the Kentucky Employees Health Plan as provided 1
by KRS 18A.225 to 18A.2287 may be rated as a separate class 2
from other eligible employees and retirees for the purpose of 3
determining medical insurance premiums. 4
(c) For recipients of a retirement allowance who are not eligible for the same 5
level of hospital and medical benefits as recipients living in Kentucky having 6
the same Medicare hospital and medical insurance eligibility status, the board 7
shall provide a medical insurance reimbursement plan as described in 8
subsection (6) of this section. 9
(d) Notwithstanding anything in KRS Chapter 16 or 61 to the contrary, the board 10
of trustees, in its discretion, may take necessary steps to ensure compliance 11
with 42 U.S.C. sec.[secs.] 300bb-1 et seq. 12
(3) (a) Each employer participating in the Kentucky Employees Retir ement System 13
or the State Police Retirement System as provided in KRS 16.505 to 16.652 or 14
61.510 to 61.705 shall contribute to the insurance trust fund established under 15
KRS 61.701 the amount necessary to provide the monthly contribution rate as 16
provided f or under this section. Such employer contribution rate shall be 17
developed by appropriate actuarial method as a part of the determination of 18
each respective employer contribution rate determined under KRS 61.565. 19
(b) 1. Each employer described in paragraph (a) of this subsection shall deduct 20
from the creditable compensation of each member whose membership 21
date begins on or after September 1, 2008, an amount equal to one 22
percent (1%) of the member's creditable compensation. The deducted 23
amounts shall, at the discretion of the board, be credited to accounts 24
established pursuant to 26 U.S.C. sec. 401(h), within the funds 25
established in KRS 16.510 and 61.515, or the insurance trust fund 26
established under KRS 61.701. Notwithstanding the provisions of this 27
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paragraph, a transfer of assets between the accounts established pursuant 1
to 26 U.S.C. sec. 401(h), within the funds established in KRS 16.510 2
and 61.515, and the insurance trust fund established under KRS 61.701 3
shall not be allowed. 4
2. The employer shall file the contributions as provided by subparagraph 1. 5
of this paragraph at the retirement office in accordance with KRS 6
61.675. Any interest or penalties paid on any delinquent contributions 7
shall be credited to accounts established pursuant to 26 U.S.C. sec. 8
401(h), within the funds established in KRS 16.510 and 61.515, or the 9
insurance trust fund established under KRS 61.701. Notwithstanding 10
any minimum compensation requirements provided by law, the 11
deductions provided by this paragraph shall be made, and the 12
compensation of the member shall be reduced accordingly. 13
3. Each employer shall submit payroll reports, contributions lists, and other 14
data as may be required by administrative regulation promulgated by the 15
board of trustees pursuant to KRS Chapter 13A. 16
4. Every member shall be deemed to consent and agree to the deductions 17
made pursuant to this paragraph, and the payment of salary or 18
compensation less the deductions shall be a full and complete discharge 19
of all claims for services rendered by the person durin g the period 20
covered by the payment, except as to any benefits provided by KRS 21
16.505 to 16.652 or 61.510 to 61.705. No member may elect whether to 22
participate in, or choose the contribution amount to accounts established 23
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 24
16.510 and 61.515, or the insurance trust fund established under KRS 25
61.701. The member shall have no option to receive the contribution 26
required by this paragraph directly instead of having the contribution 27
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paid to accounts established pursuant to 26 U.S.C. sec. 401(h) within the 1
funds established in KRS 16.510 and 61.515, or the insurance trust fund 2
established under KRS 61.701. No member may receive a rebate or 3
refund of contributions. If a member establishes a members hip date 4
prior to September 1, 2008, pursuant to KRS 61.552(2) or (3), then this 5
paragraph shall not apply to the member and all contributions previously 6
deducted in accordance with this paragraph shall be refunded to the 7
member without interest. The contr ibution made pursuant to this 8
paragraph shall not act as a reduction or offset to any other contribution 9
required of a member or recipient under KRS 16.505 to 16.652 or 10
61.510 to 61.705. 11
5. The board of trustees, at its discretion, may direct that the cont ributions 12
required by this paragraph be accounted for within accounts established 13
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 14
16.510 and 61.515, or the insurance trust fund established under KRS 15
61.701, through the use of separate accounts. 16
(4) (a) The premium required to provide hospital and medical insurance plan 17
coverage under this section shall be paid wholly or partly from funds 18
contributed by: 19
1. The recipient of a retirement allowance, by payroll deduction from his 20
or her retirement allowance, or by other method; 21
2. The insurance trust fund established under KRS 61.701 or accounts 22
established pursuant to 26 U.S.C. sec. 401(h) within the funds 23
established in KRS 16.510 and 61.515; 24
3. Another state -administered retirement syst em, including the County 25
Employees Retirement System, under a reciprocal arrangement, except 26
that any portion of the premium paid from the funds specified by 27
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subparagraph 2. of this paragraph under a reciprocal agreement shall not 1
exceed the amount that wo uld be payable under this section if all the 2
member's service were in the systems administered by the Kentucky 3
Retirement Systems. If the board provides for cross -referencing of 4
insurance premiums, the employer's contribution for the working 5
member or spou se shall be applied toward the premium, and the 6
insurance trust fund established under KRS 61.701 or accounts 7
established pursuant to 26 U.S.C. sec. 401(h) within the funds 8
established in KRS 16.510 and 61.515 shall pay the balance; or 9
4. A combination of the fund sources described by subparagraphs 1. to 3. 10
of this paragraph. 11
Group rates under the hospital and medical insurance plan shall be made 12
available to the spouse, each dependent child, and each disabled child, 13
regardless of the disabled child's age, of a recipient who is a former member 14
or the beneficiary, if the premium for the hospital and medical insurance for 15
the spouse, each dependent child, and each disabled child, or beneficiary is 16
paid by payroll deduction from the retirement allowance, elect ronic funds 17
transfer, or by another method. For purposes of this subsection only, a child 18
shall be considered disabled if he or she has been determined to be eligible for 19
federal Social Security disability benefits or meets the dependent disability 20
standard established by the Department of Employee Insurance in the 21
Personnel Cabinet. 22
(b) For a member who began participating in the system prior to July 1, 2003, the 23
monthly contribution rate shall be paid by the system from the funds specified 24
under paragraph (a)2. of this subsection and shall be equal to a percentage of 25
the single premium to cover the retired member as follows: 26
1. One hundred percent (100%) of the monthly premium for single 27
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coverage shall be paid for a retired member who had two hundred forty 1
(240) months of service or more upon retirement or for a retired member 2
who when he or she was an employee became disabled as a direct result 3
of an act in line of duty as defined in KRS 16.505 or as a result of a 4
duty-related injury as defined in KRS 61.621; 5
2. Seventy-five percent (75%) of the monthly premium for single coverage 6
shall be paid for a retired member who had less than two hundred forty 7
(240) months of service but at least one hundred eighty (180) months of 8
service upon retirement, provided such retired member agrees to pay the 9
remaining twenty -five percent (25%) by payroll deduction from his or 10
her retirement allowance, electronic funds transfer, or by another 11
method; 12
3. Fifty percent (50%) of the monthly premium for single coverage shall be 13
paid for a retired member who had less than one hundred eighty (180) 14
months of service but had at least one hundred twenty (120) months of 15
service upon retirement, provided such retired member agrees to pay the 16
remaining fifty percent (50%) by payroll deduc tion from his or her 17
retirement allowance, electronic funds transfer, or by another method; or 18
4. Twenty-five percent (25%) of the monthly premium for single coverage 19
shall be paid for a retired member who had less than one hundred twenty 20
(120) months of s ervice but had at least forty -eight (48) months of 21
service upon retirement, provided such retired member agrees to pay the 22
remaining seventy-five percent (75%) by payroll deduction from his or 23
her retirement allowance, electronic funds transfer, or by anot her 24
method. 25
(c) Notwithstanding paragraph (b) of this subsection, for a member participating 26
in the system prior to July 1, 2003, who: 27
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1. Dies as a direct result of an act in line of duty as defined in KRS 16.505 1
or dies as a result of a duty -related injury as defined in KRS 61.621, the 2
monthly premium shall be paid for his or her spouse so long as the 3
spouse remains eligible for a monthly retirement benefit; 4
2. Becomes totally and permanently disabled as defined in KRS 16.582 as 5
a direct result of an act in line of duty as defined in KRS 16.505 or 6
becomes disabled as a result of a duty -related injury as defined in KRS 7
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 8
monthly premium shall be paid for his or her spouse so long as the 9
member and the spouse individually remain eligible for a monthly 10
retirement benefit; and 11
3. Dies as a direct result of an act in line of duty as defined in KRS 16.505, 12
dies as a result of a duty -related injury as defined in KRS 61.621, 13
becomes totally and permanently disabled as defined in KRS 16.582 as a 14
direct result of an act in line of duty as defined in KRS 16.505, or 15
becomes disabled as a result of a duty -related injury as defined in KRS 16
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 17
monthly premium shall be paid for each dependent child as defined in 18
KRS 16.505, so long as the member remains eligible for a monthly 19
retirement benef it, unless deceased, and each dependent child 20
individually remains eligible under KRS 16.505. 21
(d) 1. For a member who began participating in the system prior to July 1, 22
2003, who was determined to be in a hazardous position in the Kentucky 23
Employees Retire ment System or in a position in the State Police 24
Retirement System, or who is receiving a retirement allowance based on 25
General Assembly service, the funds specified under paragraph (a)2. of 26
this subsection shall also pay a percentage of the monthly contri bution 27
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rate sufficient to fund the premium costs for hospital and medical 1
insurance coverage for the spouse and for each dependent child of a 2
recipient. 3
2. The percentage of the monthly contribution rate paid for the spouse and 4
each dependent child of a re cipient who was in a hazardous position or 5
who is receiving a retirement allowance based on General Assembly 6
service in accordance with subparagraph 1. of this paragraph shall be 7
based solely on the member's service in a hazardous position using the 8
formula in paragraph (b) of this subsection. 9
(e) For members who begin participating in the system on or after July 1, 2003: 10
1. Participation in the insurance benefits provided under this section shall 11
not be allowed until the member has earned at least one hund red twenty 12
(120) months of service in the state -administered retirement systems, 13
except that for members who begin participating in the system on or 14
after September 1, 2008, participation in the insurance benefits provided 15
under this section shall not be a llowed until the member has earned at 16
least one hundred eighty (180) months of service credited under KRS 17
16.543(1) or 61.543(1), or another state-administered retirement system. 18
2. A member who meets the minimum service requirements as provided by 19
subparagraph 1. of this paragraph shall upon retirement be eligible for 20
the following monthly contribution rate to be paid on his or her behalf, 21
or on behalf of the spouse or dependent of a member with service in a 22
hazardous position, from the funds specified und er paragraph (a)2. of 23
this subsection: 24
a. For members with service in a nonhazardous position, a monthly 25
insurance contribution of ten dollars ($10) for each year of service 26
as a participating employee in a nonhazardous position; 27
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b. For members with servic e in a hazardous position or who 1
participate in the State Police Retirement System, a monthly 2
insurance contribution of fifteen dollars ($15) for each year of 3
service as a participating employee in a hazardous position or the 4
State Police Retirement System; and 5
c. Upon the death of the retired member, the beneficiary, if the 6
beneficiary is the member's spouse, shall be entitled to a monthly 7
insurance contribution of ten dollars ($10) for each year of service 8
the member attained as a participating employee i n a hazardous 9
position. 10
3. The minimum service requirement to participate in benefits as provided 11
by subparagraph 1. of this paragraph shall be waived for a member who 12
receives a satisfactory determination of a hazardous disability that is a 13
direct result of an act in line of duty as defined in KRS 16.505 or for a 14
member who is disabled as a result of a duty -related injury as defined 15
in Section 1 of this Act and is eligible for the benefits provided under 16
subsection (5)(c) of Section 1 of this Act , and the member shall be 17
entitled to the benefits payable under this subsection as though the 18
member had twenty (20) years of service in a hazardous position. 19
4. The minimum service required to participate in benefits as provided by 20
subparagraph 1. of this paragrap h shall be waived for a member who is 21
disabled as a result of a duty -related injury as defined in KRS 61.621 22
and is eligible for the benefits provided under[by] KRS 61.621(5)(b), 23
and the member shall be entitled to the benefits payable under this 24
subsection as though the member had twenty (20) years of service in a 25
nonhazardous position. 26
5. Notwithstanding the provisions of this paragraph, the minimum service 27
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requirement to participate in benefits as provided by subparagraph 1. of 1
this paragraph shall be wa ived for a [for a ]member who dies as a direct 2
result of an act in line of duty as defined in KRS 16.505, who becomes 3
totally and permanently disabled as defined in KRS 16.582 as a direct 4
result of an act in line of duty as defined in KRS 16.505, who dies as a 5
result of a duty -related injury as defined in KRS 61.621, or who 6
is[becomes] disabled as a result of a duty -related injury as defined in 7
KRS 61.621 and is eligible for the benefits provided under[by] KRS 8
61.621(5)(a), and the premium for the member, t he member's spouse, 9
and for each dependent child as defined in KRS 16.505 shall be paid in 10
full by the systems so long as the member, member's spouse, or 11
dependent child individually remains eligible for a monthly retirement 12
benefit. 13
6. Except as provided by subparagraph 5. of this paragraph, the monthly 14
insurance contribution amount shall be increased: 15
a. On July 1 of each year by one and one -half percent (1.5%). The 16
increase shall be cumulative and shall continue to accrue after the 17
member's retirement fo r as long as a monthly insurance 18
contribution is payable to the retired member or beneficiary but 19
shall not apply to any increase in the contribution attributable to 20
the increase specified by subdivision b. of this subparagraph; and 21
b. On January 1 of each year by five dollars ($5) for members who 22
have accrued an additional full year of service as a participating 23
employee beyond the career threshold, subject to the following 24
restrictions: 25
i. The additional insurance contribution provided by this 26
subdivision shall only be applied to the monthly contribution 27
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amounts provided under subparagraph 2.a. and b. of this 1
paragraph; 2
ii. The additional insurance contribution provided by this 3
subdivision shall only be payable towards the health plans 4
offered by the syste m to retirees who are not eligible for 5
Medicare or for reimbursements provided to retirees not 6
eligible for Medicare pursuant to subsection (6)(a)2. of this 7
section; and 8
iii. In order for the annual increase to occur as provided by this 9
subdivision, the fu nding level of retiree health benefits for 10
the system in which the employee is receiving the additional 11
insurance contribution shall be at least ninety percent (90%) 12
as of the most recent actuarial valuation and be projected by 13
the actuary to remain ninety percent (90%) for the year in 14
which the increase is provided. 15
7. The benefits of this paragraph provided to a member whose participation 16
begins on or after July 1, 2003, shall not be considered as benefits 17
protected by the inviolable contract provisions o f KRS 16.652 or 18
61.692. The General Assembly reserves the right to suspend or reduce 19
the benefits conferred in this paragraph if in its judgment the welfare of 20
the Commonwealth so demands. 21
8. An employee whose membership date is on or after September 1, 20 08, 22
who retires and is reemployed in a regular full -time position required to 23
participate in the system or the County Employees Retirement System 24
shall not be eligible for health insurance coverage or benefits provided 25
by this section and shall take coverage with his or her employing agency 26
during the period of reemployment in a regular full-time position. 27
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9. As used in[For purposes of] this paragraph: 1
a. "Career threshold" for a member with service in a nonhazardous 2
position means twenty -seven (27) years of service credited under 3
KRS 16.543(1), 61.543(1), 78.615(1), or another state -4
administered retirement system and for a member with service in a 5
hazardous position means the service requirements specified by 6
KRS 16.577(2) or (3) or 16.583(6)(b), as applicable; and 7
b. "Funding level" means the actuarial value of assets divided by the 8
actuarially accrued liability expressed as a percentage that is 9
determined and reported by the system's actuary in the annual 10
actuarial valuation. 11
(f) For members with service in another state -administered retirement system 12
who select hospital and medical insurance plan coverage through the system: 13
1. The system shall compute the member's combined service, including 14
service credit in another state -administered retirement system, and 15
calculate the portion of the member's premium monthly contribution rate 16
to be paid by the funds specified under paragraph (a)2. of this subsection 17
according to the criteria established in paragraphs (a) to (e) of this 18
subsection. Each state -administered retirement system shall pay 19
annually to the insurance trust fund established under KRS 61.701 the 20
portion of the system's co st of the retiree's monthly contribution for 21
single coverage for hospital and medical insurance plan which shall be 22
equal to the percentage of the member's number of months of service in 23
the other state -administered retirement plan divided by his or her to tal 24
combined service and in conjunction with the reciprocal agreement 25
established between the system and the other state -administered 26
retirement systems. The amounts paid by the other state -administered 27
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retirement plans and by the Kentucky Retirement Syste ms from funds 1
specified under paragraph (a)2. of this subsection shall not be more than 2
one hundred percent (100%) of the monthly contribution adopted by the 3
respective boards of trustees; 4
2. A member may not elect coverage for hospital and medical benefit s 5
through more than one (1) of the state -administered retirement systems; 6
and 7
3. A state -administered retirement system shall not pay any portion of a 8
member's monthly contribution for medical insurance unless the 9
member is a recipient or annuitant of the plan. 10
(5) Premiums paid for hospital and medical insurance coverage procured under 11
authority of this section shall be exempt from any premium tax which might 12
otherwise be required under KRS Chapter 136. The payment of premiums by the 13
funds described by sub section (4)(a)2. of this section shall not constitute taxable 14
income to an insured recipient. No commission shall be paid for hospital and 15
medical insurance procured under authority of this section. 16
(6) (a) The board shall promulgate an administrative regulation to establish a medical 17
insurance reimbursement plan to provide reimbursement for hospital and 18
medical insurance plan premiums of recipients of a retirement allowance who: 19
1. Are not eligible for the same level of hospital and medical benefits as 20
recipients living in Kentucky and having the same Medicare hospital 21
and medical insurance eligibility status; or 22
2. Are eligible for retiree health subsidies as provided by subsection (4)(e) 23
of this section, except for those recipients eligible for full premi um 24
subsidies under subsection (4)(e)5. of this section. The reimbursement 25
program as provided by this subparagraph shall be available to the 26
recipient regardless of the hospital and medical insurance plans offered 27
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by the systems. 1
(b) An eligible recipient shall file proof of payment for hospital and medical 2
insurance plan coverage with the retirement office. Reimbursement to eligible 3
recipients shall be made on a quarterly basis. The recipient shall be eligible 4
for reimbursement of substantiated medical ins urance premiums for an 5
amount not to exceed the total monthly contribution rate determined under 6
subsection (4) of this section. 7
(c) For purposes of recipients described by paragraph (a)1. of this subsection, the 8
plan shall not be made available if all rec ipients are eligible for the same 9
coverage as recipients living in Kentucky. 10
Section 3. KRS 78.5536 is amended to read as follows: 11
(1) As used in[For purposes of] this section: 12
(a) "Hospital and medical insurance plan" m ay include, at the board's discretion, 13
any one (1) or more of the following: 14
1. Any hospital and medical expense policy or certificate, provider -15
sponsored integrated health delivery network, self -insured medical plan, 16
health maintenance organization contract, or other health benefit plan; 17
2. Any health savings account as permitted by 26 U.S.C. sec. 223 or health 18
reimbursement arrangement or a similar account as may be permitted by 19
26 U.S.C. sec. 105 or 106. Such arrangement or account, at the board's 20
discretion, may reimburse any medical expense permissible under 26 21
U.S.C. sec. 213; or 22
3. A medical insurance reimbursement program established by the board 23
through the promulgation of administrative regulation under which 24
members purchase individual health insurance coverage through a health 25
insurance exchange established under 42 U.S.C. sec. 18031 or 18041; 26
(b) "Monthly contribution rate" shall be the amount determined by the board 27
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based upon the requirements of subsection (4)(a) to (d) of this section, except 1
that for members who began participating in the system on or after July 1, 2
2003, the term shall mean the amount determined in subsection (4)(e) of this 3
section; and 4
(c) "Months of service" shall mean the total months of combined service used to 5
determine b enefits under the system, except service added to determine 6
disability benefits or service otherwise prohibited from being used to 7
determine retiree health benefits under KRS 78.510 to 78.852 shall not be 8
counted as "months of service." 9
(2) (a) 1. The board of trustees of the system shall arrange by appropriate contract 10
or on a self -insured basis to provide a group hospital and medical 11
insurance plan coverage for: 12
a. Present and future recipients of a retirement allowance from the 13
County Employees Retirement System; and 14
b. The spouse and each qualified dependent of a recipient who is a 15
former member or the beneficiary, provided the spouse and 16
dependent meet the requirements to participate in the hospital and 17
medical insurance plans established, contracted, o r authorized by 18
the system. 19
2. Any recipient who chooses coverage under a hospital and medical 20
insurance plan shall pay, by payroll deduction from the retirement 21
allowance, electronic funds transfer, or by another method, the 22
difference between the premium cost of the hospital and medical 23
insurance plan coverage selected and the monthly contribution rate to 24
which he or she would be entitled under this section. 25
(b) 1. For present and future recipients of a retirement allowance from the 26
system who are not eli gible for Medicare and for those recipients 27
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described in subparagraph 3.b. of this paragraph, the board may 1
authorize these participants to be included in the Kentucky Employees 2
Health Plan as provided by KRS 18A.225 to 18A.2287 and shall provide 3
benefits for recipients in the plan equal to those provided to state 4
employees having the same Medicare hospital and medical insurance 5
eligibility status. Notwithstanding the provisions of any other statute 6
except subparagraph 3.b. of this paragraph, system recipie nts shall be 7
included in the same class as current state employees for purposes of 8
determining medical insurance policies and premiums in the Kentucky 9
Employees Health Plan as provided by KRS 18A.225 to 18A.2287. 10
2. Regardless of age, if a recipient or the spouse or dependent child of a 11
recipient who elects coverage becomes eligible for Medicare, he or she 12
shall participate in the plans offered by the systems for Medicare 13
eligible recipients. Individuals participating in the Medicare eligible 14
plans may be required to obtain and pay for Medicare Part A and Part B 15
coverage in order to participate in the Medicare eligible plans offered by 16
the system. 17
3. The system shall continue to provide the same hospital and medical 18
insurance plan coverage for recipients and qualifying dependents after 19
the age of sixty-five (65) as before the age of sixty-five (65), if: 20
a. The recipient is not eligible for Medicare coverage; or 21
b. The recipient would otherwise be eligible for Medicare c overage 22
but is subject to the Medicare Secondary Payer Act under 42 23
U.S.C. sec. 1395y(b) and has been reemployed by a participating 24
agency which offers the recipient a hospital and medical insurance 25
benefit or by a participating agency which is prevented f rom 26
offering a hospital and medical benefit to the recipient as a 27
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condition of reemployment under KRS 70.293, 95.022, or 1
164.952. Individuals who are eligible, pursuant to this subdivision, 2
to be included in the Kentucky Employees Health Plan as provided 3
by KRS 18A.225 to 18A.2287 may be rated as a separate class 4
from other eligible employees and retirees for the purpose of 5
determining medical insurance premiums. 6
(c) For recipients of a retirement allowance who are not eligible for the same 7
level of hospital and medical benefits as recipients living in Kentucky having 8
the same Medicare hospital and medical insurance eligibility status, the board 9
shall provide a medical insurance reimbursement plan as described in 10
subsection (6) of this section. 11
(d) Notwithstanding anything in KRS Chapter 78 to the contrary, the board of 12
trustees, in its discretion, may take necessary steps to ensure compliance with 13
42 U.S.C. sec. 300bb-1 et seq. 14
(3) (a) Each employer participating in the County Employees Retirement System as 15
provided in KRS 78.510 to 78.852 shall contribute to the insurance trust fund 16
established by KRS 61.701 the amount necessary to provide the monthly 17
contribution rate as provided for under this section. Such employer 18
contribution rate shall be developed by appropriate actuarial method as a part 19
of the determination of each respective employer contribution rate determined 20
under KRS 78.635. 21
(b) 1. Each employer described in paragraph (a) of this subsection shall deduct 22
from the creditable compensation of each member whose membership 23
date begins on or after July 1, 2003, and who is subject to the benefits 24
provided under subsection (4)(e) of this section, an amount equal to one 25
percent (1%) of the member's creditable compensation if the member is 26
participating in a nonhazardous position and two percent (2%) of the 27
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member's creditable compensation if the member is participating in a 1
hazardous position. The deducted amounts shall, at the discretion of the 2
board, be credited to accounts established pursuant to 26 U.S .C. sec. 3
401(h), within the funds established in KRS 78.520, or the insurance 4
trust fund established under KRS 61.701. Notwithstanding the 5
provisions of this paragraph, a transfer of assets between the accounts 6
established pursuant to 26 U.S.C. sec. 401(h) , within the funds 7
established in KRS 78.520, and the insurance trust fund established 8
under KRS 61.701 shall not be allowed. 9
2. The employer shall file the contributions as provided by subparagraph 1. 10
of this paragraph at the retirement office in accordan ce with KRS 11
78.625. Any interest or penalties paid on any delinquent contributions 12
shall be credited to accounts established pursuant to 26 U.S.C. sec. 13
401(h), within the funds established in KRS 78.520, or the insurance 14
trust fund established under KRS 61 .701. Notwithstanding any 15
minimum compensation requirements provided by law, the deductions 16
provided by this paragraph shall be made, and the compensation of the 17
member shall be reduced accordingly. 18
3. Each employer shall submit payroll reports, contributions lists, and other 19
data as may be required by administrative regulation promulgated by the 20
board of trustees pursuant to KRS Chapter 13A. 21
4. Every member shall be deemed to consent and agree to the deductions 22
made pursuant to this paragraph, and the paym ent of salary or 23
compensation less the deductions shall be a full and complete discharge 24
of all claims for services rendered by the person during the period 25
covered by the payment, except as to any benefits provided by KRS 26
78.510 to 78.852. No member may e lect whether to participate in, or 27
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choose the contribution amount to accounts established pursuant to 26 1
U.S.C. sec. 401(h) within the funds established in KRS 78.520, or the 2
insurance trust fund established under KRS 61.701. The member shall 3
have no optio n to receive the contribution required by this paragraph 4
directly instead of having the contribution paid to accounts established 5
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 6
78.520, or the insurance trust fund established under KR S 61.701. No 7
member may receive a rebate or refund of contributions. If a member 8
establishes a membership date prior to July 1, 2003, pursuant to KRS 9
61.552(2) or (3) or who is subject to the benefits provided under 10
subsection (4)(b) or (d) of this section , then this paragraph shall not 11
apply to the member and all contributions previously deducted in 12
accordance with this paragraph shall be refunded to the member without 13
interest. The contribution made pursuant to this paragraph shall not act 14
as a reduction or offset to any other contribution required of a member 15
or recipient under KRS 78.510 to 78.852. 16
5. The board of trustees, at its discretion, may direct that the contributions 17
required by this paragraph be accounted for within accounts established 18
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 19
78.520, or the insurance trust fund established under KRS 61.701, 20
through the use of separate accounts. 21
(4) (a) The premium required to provide hospital and medical insurance plan 22
coverage unde r this section shall be paid wholly or partly from funds 23
contributed by: 24
1. The recipient of a retirement allowance, by payroll deduction from his 25
or her retirement allowance, electronic funds transfer, or by other 26
method; 27
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2. The insurance trust fund estab lished by KRS 61.701 or accounts 1
established pursuant to 26 U.S.C. sec. 401(h) within the funds 2
established in KRS 78.520; 3
3. Another state -administered retirement system, including the systems 4
administered by Kentucky Retirement Systems, under a reciproca l 5
arrangement, except that any portion of the premium paid from the 6
funds specified by subparagraph 2. of this paragraph under a reciprocal 7
agreement shall not exceed the amount that would be payable under this 8
section if all the member's service were in t he County Employees 9
Retirement System. If the board provides for cross -referencing of 10
insurance premiums, the employer's contribution for the working 11
member or spouse shall be applied toward the premium, and the 12
insurance trust fund established under KRS 6 1.701 or accounts 13
established pursuant to 26 U.S.C. sec. 401(h) within the funds 14
established in KRS 78.520, shall pay the balance; or 15
4. A combination of the fund sources described by subparagraphs 1. to 3. 16
of this paragraph. 17
Group rates under the hospita l and medical insurance plan shall be made 18
available to the spouse, each dependent child, and each disabled child, 19
regardless of the disabled child's age, of a recipient who is a former member 20
or the beneficiary, if the premium for the hospital and medical insurance for 21
the spouse, each dependent child, and each disabled child, or beneficiary is 22
paid by payroll deduction from the retirement allowance, electronic funds 23
transfer, or by another method. For purposes of this subsection only, a child 24
shall be considered disabled if he or she has been determined to be eligible for 25
federal Social Security disability benefits or meets the dependent disability 26
standard established by the Department of Employee Insurance in the 27
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Personnel Cabinet. 1
(b) For a member who began participating in the system prior to July 1, 2003, the 2
monthly contribution rate shall be paid by the system from the funds specified 3
under paragraph (a)2. of this subsection and shall be equal to a percentage of 4
the single premium to cover the retired member as follows: 5
1. One hundred percent (100%) of the monthly premium for single 6
coverage shall be paid for a retired member who had two hundred forty 7
(240) months of service or more upon retirement or for a retired member 8
who when he or she was an emp loyee was disabled as a direct result of 9
an act in line of duty as defined in KRS 78.510(48) or as a result of a 10
duty-related injury as defined in KRS 61.621; 11
2. Seventy-five percent (75%) of the monthly premium for single coverage 12
shall be paid for a reti red member who had less than two hundred forty 13
(240) months of service but at least one hundred eighty (180) months of 14
service upon retirement, provided such retired member agrees to pay the 15
remaining twenty -five percent (25%) by payroll deduction from his or 16
her retirement allowance, electronic funds transfer, or by another 17
method; 18
3. Fifty percent (50%) of the monthly premium for single coverage shall be 19
paid for a retired member who had less than one hundred eighty (180) 20
months of service but had at leas t one hundred twenty (120) months of 21
service upon retirement, provided such retired member agrees to pay the 22
remaining fifty percent (50%) by payroll deduction from his or her 23
retirement allowance, electronic funds transfer, or by another method; or 24
4. Twenty-five percent (25%) of the monthly premium for single coverage 25
shall be paid for a retired member who had less than one hundred twenty 26
(120) months of service but had at least forty -eight (48) months of 27
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service upon retirement, provided such retired member agrees to pay the 1
remaining seventy-five percent (75%) by payroll deduction from his or 2
her retirement allowance, electronic funds transfer, or by another 3
method. 4
(c) Notwithstanding paragraph (b) of this subsection, for a member participating 5
in the system prior to July 1, 2003, who: 6
1. Dies as a direct result of an act in line of duty as defined in KRS 78.510 7
or dies as a result of a duty -related injury as defined in KRS 61.621, the 8
monthly premium shall be paid for his or her spouse so long as the 9
spouse remains eligible for a monthly retirement benefit; 10
2. Becomes totally and permanently disabled as defined in KRS 78.5524 as 11
a direct result of an act in line of duty as defined in KRS 78.510 or 12
becomes disabled as a result of a duty -related injury as defined in KRS 13
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 14
monthly premi um shall be paid for his or her spouse so long as the 15
member and the spouse individually remain eligible for a monthly 16
retirement benefit; and 17
3. Dies as a direct result of an act in line of duty as defined in KRS 78.510, 18
dies as a result of a duty -related injury as defined in KRS 61.621, 19
becomes totally and permanently disabled as defined in KRS 78.5524 as 20
a direct result of an act in line of duty as defined in KRS 78.510, or 21
becomes disabled as a result of a duty -related injury as defined in KRS 22
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 23
monthly premium shall be paid for each dependent child as defined in 24
KRS 78.510, so long as the member remains eligible for a monthly 25
retirement benefit, unless deceased, and each dependent c hild 26
individually remains eligible under KRS 78.510. 27
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(d) 1. For a member who began participating in the system prior to July 1, 1
2003, who was determined to be in a hazardous position in the County 2
Employees Retirement System, or who is receiving a retireme nt 3
allowance based on General Assembly service, the funds specified under 4
paragraph (a)2. of this subsection shall also pay a percentage of the 5
monthly contribution rate sufficient to fund the premium costs for 6
hospital and medical insurance coverage for t he spouse and for each 7
dependent child of a recipient. 8
2. The percentage of the monthly contribution rate paid for the spouse and 9
each dependent child of a recipient who was in a hazardous position or 10
who is receiving a retirement allowance based on Genera l Assembly 11
service in accordance with subparagraph 1. of this paragraph shall be 12
based solely on the member's service in a hazardous position using the 13
formula in paragraph (b) of this subsection, except that for any recipient 14
of a retirement allowance fro m the County Employees Retirement 15
System who was contributing to the system on January 1, 1998, for 16
service in a hazardous position, the percentage of the monthly 17
contribution shall be based on the total of hazardous service and any 18
nonhazardous service as a police or firefighter with the same agency, if 19
that agency was participating in the County Employees Retirement 20
System but did not offer hazardous duty coverage for its police and 21
firefighters at the time of initial participation. 22
(e) For members who begin participating in the system on or after July 1, 2003: 23
1. Participation in the insurance benefits provided under this section shall 24
not be allowed until the member has earned at least one hundred twenty 25
(120) months of service in the state -administered retirement systems, 26
except that for members who begin participating in the system on or 27
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after September 1, 2008, participation in the insurance benefits provided 1
under this section shall not be allowed until the member has earned at 2
least one hundred eight y (180) months of service credited under KRS 3
78.615(1) or another state-administered retirement system; 4
2. A member who meets the minimum service requirements as provided by 5
subparagraph 1. of this paragraph shall upon retirement be eligible for 6
the following monthly contribution rate to be paid on his or her behalf, 7
or on behalf of the spouse or dependent of a member with service in a 8
hazardous position, from the funds specified under paragraph (a)2. of 9
this subsection: 10
a. For members with service in a non hazardous position who do not 11
meet the career threshold, a monthly insurance contribution of ten 12
dollars ($10) for each year of service as a participating employee 13
in a nonhazardous position; 14
b. For members with service in a nonhazardous position who meet 15
the career threshold, a monthly insurance contribution towards the 16
health plans offered to retirees who are not eligible for Medicare 17
of forty dollars ($40) for each year of service as a participating 18
employee in a nonhazardous position and a monthly insur ance 19
contribution towards the health plans offered to retirees who are 20
eligible for Medicare of ten dollars ($10) for each year of service 21
as a participating employee in a nonhazardous position. The 22
monthly insurance contribution payable to retirees eligib le for 23
Medicare under this subdivision shall be adjusted as necessary so 24
that it is equivalent to the monthly contribution amount computed 25
under subdivision a. of this subparagraph as adjusted by 26
subparagraph 6.a. of this paragraph; 27
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c. For members with service in a hazardous position who do not meet 1
the career threshold, a monthly insurance contribution of fifteen 2
dollars ($15) for each year of service as a participating employee 3
in a hazardous position; 4
d. For members with service in a hazardous position w ho meet the 5
career threshold, a monthly insurance contribution towards the 6
health plans offered to retirees who are not eligible for Medicare 7
of fifty dollars ($50) for each year of service as a participating 8
employee in a hazardous position and a monthly insurance 9
contribution towards the health plans offered to retirees who are 10
eligible for Medicare of fifteen dollars ($15) for each year of 11
service as a participating employee in a hazardous position. The 12
monthly insurance contribution payable to retirees eligible for 13
Medicare under this subdivision shall be adjusted as necessary so 14
that it is equivalent to the monthly contribution amount computed 15
under subdivision c. of this subparagraph as adjusted by 16
subparagraph 6.a. of this paragraph; and 17
e. Upon the d eath of the retired member, the beneficiary, if the 18
beneficiary is the member's spouse, shall be entitled to a monthly 19
insurance contribution of ten dollars ($10) for each year of service 20
the member attained as a participating employee in a hazardous 21
position; 22
3. The minimum service requirement to participate in benefits as provided 23
by subparagraph 1. of this paragraph shall be waived for a member who 24
receives a satisfactory determination of a hazardous disability that is a 25
direct result of an act in line of duty as defined in KRS 78.510(48) or for 26
a member who is disabled as a result of a duty -related injury as 27
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defined in Section 1 of this Act and is eligible for the benefits provided 1
under subsection (5)(c) of Section 1 of this Act, and the member shall 2
be entitled to the benefits payable under this subsection as though the 3
member had twenty (20) years of service in a hazardous position; 4
4. The minimum service required to participate in benefits as provided by 5
subparagraph 1. of this paragraph shall be waiv ed for a member who is 6
disabled as a result of a duty -related injury as defined in KRS 61.621 7
and is eligible for the benefits provided under[by] KRS 61.621(5)(b), 8
and the member shall be entitled to the benefits payable under this 9
subsection as though the member had twenty (20) years of service in a 10
nonhazardous position; 11
5. Notwithstanding the provisions of this paragraph, the minimum service 12
requirement to participate in benefits as provided by subparagraph 1. of 13
this paragraph shall be waived for a memb er who dies as a direct result 14
of an act in line of duty as defined in KRS 78.510(48), who is[becomes] 15
totally and permanently disabled as defined in KRS 78.5524 as a direct 16
result of an act in line of duty as defined in KRS 78.510, who dies as a 17
result of a duty -related injury as defined in KRS 61.621, or who 18
is[becomes] disabled as a result of a duty -related injury as defined in 19
KRS 61.621 and is eligible for the benefits provided under[by] KRS 20
61.621(5)(a), and the premium for the member, the member's sp ouse, 21
and for each dependent child as defined in KRS 78.510 shall be paid in 22
full by the systems so long as the member, member's spouse, or 23
dependent child individually remains eligible for a monthly retirement 24
benefit; 25
6. Except as provided by subparagrap h 5. of this paragraph, the monthly 26
insurance contribution amount shall be increased: 27
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a. On July 1 of each year by one and one -half percent (1.5%). The 1
increase shall be cumulative and shall continue to accrue after the 2
member's retirement for as long as a monthly insurance 3
contribution is payable to the retired member or beneficiary but 4
shall not apply to any increase in the contribution attributable to 5
the increase specified by subdivision b. of this subparagraph; and 6
b. On January 1 of each year by five dollars ($5) for members who 7
have accrued an additional full year of service as a participating 8
employee beyond the career threshold, subject to the following 9
restrictions: 10
i. The additional insurance contribution provided by this 11
subdivision shall only be applied to the monthly contribution 12
amounts provided under subparagraph 2.b. and d. of this 13
paragraph; 14
ii. The additional insurance contribution provided by this 15
subdivision shall only be payable towards the health plans 16
offered by the system to retirees who are not eligible for 17
Medicare or for reimbursements provided to retirees not 18
eligible for Medicare pursuant to subsection (6)(a)2. of this 19
section; and 20
iii. In order for the annual increase to occur as provided by this 21
subdivision, the funding level of retiree health benefits for 22
the system in which the employee is receiving the additional 23
insurance contribution shall be at least ninety percent (90%) 24
as of the most recent actuarial valuation and be projected by 25
the actuary to remain ninety percent (90%) for the year in 26
which the increase is provided; 27
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7. The benefits of this paragraph provided to a member whose participation 1
begins on or after July 1, 2003, shall not be considered as benefits 2
protected by the inviolable contract provisions of KRS 78.852. The 3
General Assembly reserves the right to suspend or reduce the benefits 4
conferred in this paragraph if in its judgment the welfare of the 5
Commonwealth so demands; 6
8. An employee whose membership date is on or after September 1, 2008, 7
who retires and is r eemployed in a regular full -time position required to 8
participate in the system or the Kentucky Retirement Systems shall not 9
be eligible for health insurance coverage or benefits provided by this 10
section and shall take coverage with his or her employing ag ency during 11
the period of reemployment in a regular full-time position; and 12
9. As used in[For purposes of] this paragraph: 13
a. "Career threshold" for a member with service in a nonhazardous 14
position means twenty -seven (27) years of service credited under 15
KRS 16.543(1), 61.543(1), 78.615(1), or another state -16
administered retirement system and for a member with service in a 17
hazardous position means the service requirements specified by 18
KRS 78.5514(2)(a)2. or (3)(b), or 78.5516(6)(b), as applicable; 19
and 20
b. "Funding level" means the actuarial value of assets divided by the 21
actuarially accrued liability expressed as a percentage that is 22
determined and reported by the system's actuary in the annual 23
actuarial valuation. 24
(f) For members with service in another st ate-administered retirement system 25
who select hospital and medical insurance plan coverage through the system: 26
1. The system shall compute the member's combined service, including 27
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service credit in another state -administered retirement system, and 1
calculate the portion of the member's premium monthly contribution rate 2
to be paid by the funds specified under paragraph (a)2. of this subsection 3
according to the criteria established in paragraphs (a) to (e) of this 4
subsection. Each state -administered retirement system shall pay 5
annually to the insurance trust fund established under KRS 61.701 the 6
portion of the system's cost of the retiree's monthly contribution for 7
single coverage for hospital and medical insurance plan which shall be 8
equal to the percentage of the member's number of months of service in 9
the other state -administered retirement plan divided by his or her total 10
combined service and in conjunction with the reciprocal agreement 11
established between the system and the other state -administered 12
retirement systems. The amounts paid by the other state -administered 13
retirement plans and by the County Employees Retirement System from 14
funds specified under paragraph (a)2. of this subsection shall not be 15
more than one hundred percent (100%) of the monthly contr ibution 16
adopted by the respective boards of trustees; 17
2. A member may not elect coverage for hospital and medical benefits 18
through more than one (1) of the state -administered retirement systems; 19
and 20
3. A state -administered retirement system shall not pay a ny portion of a 21
member's monthly contribution for medical insurance unless the 22
member is a recipient or annuitant of the plan. 23
(5) Premiums paid for hospital and medical insurance coverage procured under 24
authority of this section shall be exempt from any p remium tax which might 25
otherwise be required under KRS Chapter 136. The payment of premiums by the 26
funds described by subsection (4)(a)2. of this section shall not constitute taxable 27
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income to an insured recipient. No commission shall be paid for hospital and 1
medical insurance procured under authority of this section. 2
(6) (a) The board shall promulgate an administrative regulation to establish a medical 3
insurance reimbursement plan to provide reimbursement for hospital and 4
medical insurance plan premiums of recipients of a retirement allowance who: 5
1. Are not eligible for the same level of hospital and medical benefits as 6
recipients living in Kentucky and having the same Medicare hospital 7
and medical insurance eligibility status; or 8
2. Are eligible for retir ee health subsidies as provided by subsection (4)(e) 9
of this section, except for those recipients eligible for full premium 10
subsidies under subsection (4)(e)5. of this section. The reimbursement 11
program as provided by this subparagraph shall be available t o the 12
recipient regardless of the hospital and medical insurance plans offered 13
by the systems. 14
(b) An eligible recipient shall file proof of payment for hospital and medical 15
insurance plan coverage with the retirement office. Reimbursement to eligible 16
recipients shall be made on a quarterly basis. The recipient shall be eligible 17
for reimbursement of substantiated medical insurance premiums paid by the 18
recipient to obtain coverage for an amount not to exceed the total monthly 19
contribution rate determined und er subsection (4) of this section. For 20
reimbursements provided under paragraph (a)2. of this subsection, the full 21
subsidy under subsection (4)(e)2. of this section shall be reimbursed by the 22
system to the recipient up to the amount individually paid by the recipient to 23
obtain coverage. In the case of recipients of a retirement allowance from a 24
nonhazardous position, the reimbursement shall be limited to the amount paid 25
by the recipient to obtain single coverage. 26
(c) For purposes of recipients described by p aragraph (a)1. of this subsection, the 27
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plan shall not be made available if all recipients are eligible for the same 1
coverage as recipients living in Kentucky. 2
Section 4. Notwithstanding KRS 16.505 to 16.652, 61.510 to 61 .705, 78.510 to 3
78.852, or any provision of Sections 1 to 3 of this Act to the contrary, a person whose last 4
day of paid employment was in a nonhazardous position on or after January 1, 2022, but 5
prior to the effective date of this Act, that could be certi fied as a hazardous position 6
pursuant to KRS 61.592 or 78.5520, may apply for duty -related injury disability 7
retirement benefits pursuant to Sections 1 to 3 of this Act if the person submits an 8
application on or before January 1, 2027, using an application form and process 9
developed by the Kentucky Public Pensions Authority. 10