AN ACT relating to retiree health provisions of the Kentucky Retirement Systems.

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AN ACT relating to retiree health provisions of the Kentucky Retirement Systems. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 61.702 is amended to read as follows: 3
(1) For purposes of this section: 4
(a) "Hospital and medical insurance plan" may include, at the board's discretion, 5
any one (1) or more of the following: 6
1. Any hospital and me dical expense policy or certificate, provider -7
sponsored integrated health delivery network, self -insured medical plan, 8
health maintenance organization contract, or other health benefit plan; 9
2. Any health savings account as permitted by 26 U.S.C. sec. 223 or health 10
reimbursement arrangement or a similar account as may be permitted by 11
26 U.S.C. sec. 105 or 106. Such arrangement or account, at the board's 12
discretion, may reimburse any medical expen se permissible under 26 13
U.S.C. sec. 213; or 14
3. A medical insurance reimbursement program established by the board 15
through the promulgation of administrative regulation under which 16
members purchase individual health insurance coverage through a health 17
insurance exchange established under 42 U.S.C. sec. 18031 or 18041; 18
(b) "Monthly contribution rate" is the amount determined by the board based 19
upon the requirements of subsection (4)(a) to (d) of this section, except that 20
for members who began participating in the system on or after July 1, 2003, 21
the term shall mean the amount determined in subsection (4)(e) of this 22
section; and 23
(c) "Months of service" means the total months of combined service used to 24
determine benefits under the system, except service added t o determine 25
disability benefits or service otherwise prohibited from being used to 26
determine retiree health benefits under KRS 16.505 to 16.652 or 61.510 to 27
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61.705 shall not be counted as "months of service." For current and former 1
employees of the Council on Postsecondary Education who were employed 2
prior to January 1, 1993, and who earn at least fifteen (15) years of service 3
credit in the Kentucky Employees Retirement System, "months of service" 4
shall also include vested service in another retirement syst em other than the 5
Kentucky Teachers' Retirement System sponsored by the Council on 6
Postsecondary Education. 7
(2) (a) 1. The board of trustees of the system shall arrange by appropriate contract 8
or on a self -insured basis to provide a group hospital and medi cal 9
insurance plan coverage for: 10
a. Present and future recipients of a retirement allowance from the 11
Kentucky Employees Retirement System and the State Police 12
Retirement System; and 13
b. The spouse and each qualified dependent of a recipient who is a 14
former member or the beneficiary, provided the spouse and 15
dependent meet the requirements to participate in the hospital and 16
medical insurance plans established, contracted, or authorized by 17
the system. 18
2. Any recipient who chooses coverage under a hospital and medical 19
insurance plan shall pay, by payroll deduction from the retirement 20
allowance, electronic funds transfer, or by another method, the 21
difference between the premium cost of the hospital and medical 22
insurance plan coverage selected and the monthly cont ribution rate to 23
which he or she would be entitled under this section. 24
(b) 1. For present and future recipients of a retirement allowance from the 25
system who are not eligible for Medicare and for those recipients 26
described in subparagraph 3.b. of this para graph, the board may 27
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authorize these participants to be included in the Kentucky Employees 1
Health Plan as provided by KRS 18A.225 to 18A.2287 and shall provide 2
benefits for recipients in the plan equal to those provided to state 3
employees having the same M edicare hospital and medical insurance 4
eligibility status. Notwithstanding the provisions of any other statute 5
except subparagraph 3.b. of this paragraph, system recipients shall be 6
included in the same class as current state employees for purposes of 7
determining medical insurance policies and premiums in the Kentucky 8
Employees Health Plan as provided by KRS 18A.225 to 18A.2287. 9
2. Regardless of age, if a recipient or the spouse or dependent child of a 10
recipient who elects coverage becomes eligible for Medi care, he or she 11
shall participate in the plans offered by the systems for Medicare 12
eligible recipients. Individuals participating in the Medicare eligible 13
plans may be required to obtain and pay for Medicare Part A and Part B 14
coverage, in order to particip ate in the Medicare eligible plans offered 15
by the system. 16
3. The system shall continue to provide the same hospital and medical 17
insurance plan coverage for recipients and qualifying dependents after 18
the age of sixty-five (65) as before the age of sixty-five (65), if: 19
a. The recipient is not eligible for Medicare coverage; or 20
b. The recipient would otherwise be eligible for Medicare coverage 21
but is subject to the Medicare Secondary Payer Act under 42 22
U.S.C. sec. 1395y(b) and has been reemployed by a particip ating 23
agency which offers the recipient a hospital and medical insurance 24
benefit or by a participating agency which is prevented from 25
offering a hospital and medical benefit to the recipient as a 26
condition of reemployment under KRS 70.293, 95.022, or 27
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164.952. Individuals who are eligible, pursuant to this subdivision, 1
to be included in the Kentucky Employees Health Plan as provided 2
by KRS 18A.225 to 18A.2287 may be rated as a separate class 3
from other eligible employees and retirees for the purpose of 4
determining medical insurance premiums. 5
(c) For recipients of a retirement allowance who are not eligible for the same 6
level of hospital and medical benefits as recipients living in Kentucky having 7
the same Medicare hospital and medical insurance eligibility st atus, the board 8
shall provide a medical insurance reimbursement plan as described in 9
subsection (6) of this section. 10
(d) Notwithstanding anything in KRS Chapter 16 or 61 to the contrary, the board 11
of trustees, in its discretion, may take necessary steps to ensure compliance 12
with 42 U.S.C. secs. 300bb-1 et seq. 13
(3) (a) Each employer participating in the Kentucky Employees Retirement System 14
or the State Police Retirement System as provided in KRS 16.505 to 16.652 or 15
61.510 to 61.705 shall contribute to the in surance trust fund established under 16
KRS 61.701 the amount necessary to provide the monthly contribution rate as 17
provided for under this section. Such employer contribution rate shall be 18
developed by appropriate actuarial method as a part of the determinat ion of 19
each respective employer contribution rate determined under KRS 61.565. 20
(b) 1. Each employer described in paragraph (a) of this subsection shall deduct 21
from the creditable compensation of each member whose membership 22
date begins on or after July 1, 2003[September 1, 2008] , and who is 23
subject to the benefits provided under paragraph (4)(e) of this section, 24
an amount equal to one percent (1%) of the member's creditable 25
compensation if the member is participating in a nonhazardous 26
position and two perce nt (2%) of the member's creditable 27
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compensation if the member is participating in a hazardous position 1
as provided in KRS 61.592 or in a position participating in the State 2
Police Retirement System. The deducted amounts shall, at the discretion 3
of the boar d, be credited to accounts established pursuant to 26 U.S.C. 4
sec. 401(h), within the funds established in KRS 16.510 and 61.515, or 5
the insurance trust fund established under KRS 61.701. Notwithstanding 6
the provisions of this paragraph, a transfer of asset s between the 7
accounts established pursuant to 26 U.S.C. sec. 401(h), within the funds 8
established in KRS 16.510 and 61.515, and the insurance trust fund 9
established under KRS 61.701 shall not be allowed. 10
2. The employer shall file the contributions as provided by subparagraph 1. 11
of this paragraph at the retirement office in accordance with KRS 12
61.675. Any interest or penalties paid on any delinquent contributions 13
shall be credited to accounts established pursuant to 26 U.S.C. sec. 14
401(h), within the funds established in KRS 16.510 and 61.515, or the 15
insurance trust fund established under KRS 61.701. Notwithstanding 16
any minimum compensation requirements provided by law, the 17
deductions provided by this paragraph shall be made, and the 18
compensation of the member shall be reduced accordingly. 19
3. Each employer shall submit payroll reports, contributions lists, and other 20
data as may be required by administrative regulation promulgated by the 21
board of trustees pursuant to KRS Chapter 13A. 22
4. Every member shall be d eemed to consent and agree to the deductions 23
made pursuant to this paragraph, and the payment of salary or 24
compensation less the deductions shall be a full and complete discharge 25
of all claims for services rendered by the person during the period 26
covered b y the payment, except as to any benefits provided by KRS 27
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16.505 to 16.652 or 61.510 to 61.705. No member may elect whether to 1
participate in, or choose the contribution amount to accounts established 2
pursuant to 26 U.S.C. sec. 401(h) within the funds estab lished in KRS 3
16.510 and 61.515, or the insurance trust fund established under KRS 4
61.701. The member shall have no option to receive the contribution 5
required by this paragraph directly instead of having the contribution 6
paid to accounts established pursuant to 26 U.S.C. sec. 401(h) within the 7
funds established in KRS 16.510 and 61.515, or the insurance trust fund 8
established under KRS 61.701. No member may receive a rebate or 9
refund of contributions. If a member establishes a membership date 10
prior to July 1, 2003[September 1, 2008], pursuant to KRS 61.552(2) or 11
(3) or who is subject to the benefits provided under paragraphs (4)(b) 12
or (4)(d) of this section , then this paragraph shall not apply to the 13
member and all contributions previously deducted in accor dance with 14
this paragraph shall be refunded to the member without interest. The 15
contribution made pursuant to this paragraph shall not act as a reduction 16
or offset to any other contribution required of a member or recipient 17
under KRS 16.505 to 16.652 or 61.510 to 61.705. 18
5. The board of trustees, at its discretion, may direct that the contributions 19
required by this paragraph be accounted for within accounts established 20
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 21
16.510 and 61.515, or the insurance trust fund established under KRS 22
61.701, through the use of separate accounts. 23
(4) (a) The premium required to provide hospital and medical insurance plan 24
coverage under this section shall be paid wholly or partly from funds 25
contributed by: 26
1. The recipient of a retirement allowance, by payroll deduction from his 27
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or her retirement allowance, or by other method; 1
2. The insurance trust fund established under KRS 61.701 or accounts 2
established pursuant to 26 U.S.C. sec. 401(h) within the fund s 3
established in KRS 16.510 and 61.515; 4
3. Another state -administered retirement system, including the Count y 5
Employees Retirement System, under a reciprocal arrangement, except 6
that any portion of the premium paid from the funds specified by 7
subparagraph 2. of this paragraph under a reciprocal agreement shall not 8
exceed the amount that would be payable under th is section if all the 9
member's service were in the systems administered by the Kentucky 10
Retirement Systems. If the board provides for cross -referencing of 11
insurance premiums, the employer's contribution for the working 12
member or spouse shall be applied tow ard the premium, and the 13
insurance trust fund established under KRS 61.701 or accounts 14
established pursuant to 26 U.S.C. sec. 401(h) within the funds 15
established in KRS 16.510 and 61.515 shall pay the balance; or 16
4. A combination of the fund sources descri bed by subparagraphs 1. to 3. 17
of this paragraph. 18
Group rates under the hospital and medical insurance plan shall be made 19
available to the spouse, each dependent child, and each disabled child, 20
regardless of the disabled child's age, of a recipient who is a former member 21
or the beneficiary, if the premium for the hospital and medical insurance for 22
the spouse, each dependent child, and each disabled child, or beneficiary is 23
paid by payroll deduction from the retirement allowance, electronic funds 24
transfer, o r by another method. For purposes of this subsection only, a child 25
shall be considered disabled if he or she has been determined to be eligible for 26
federal Social Security disability benefits or meets the dependent disability 27
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standard established by the De partment of Employee Insurance in the 1
Personnel Cabinet. 2
(b) For a member who began participating in the system prior to July 1, 2003, the 3
monthly contribution rate shall be paid by the system from the funds specified 4
under paragraph (a)2. of this subsecti on and shall be equal to a percentage of 5
the single premium to cover the retired member as follows: 6
1. One hundred percent (100%) of the monthly premium for single 7
coverage shall be paid for a retired member who had two hundred forty 8
(240) months of service or more upon retirement or for a retired member 9
who when he or she was an employee became disabled as a direct result 10
of an act in line of duty as defined in KRS 16.505 or as a result of a 11
duty-related injury as defined in KRS 61.621; 12
2. Seventy-five percent (75%) of the monthly premium for single coverage 13
shall be paid for a retired member who had less than two hundred forty 14
(240) months of service but at least one hundred eighty (180) months of 15
service upon retirement, provided such retired member agree s to pay the 16
remaining twenty -five percent (25%) by payroll deduction from his or 17
her retirement allowance, electronic funds transfer, or by another 18
method; 19
3. Fifty percent (50%) of the monthly premium for single coverage shall be 20
paid for a retired membe r who had less than one hundred eighty (180) 21
months of service but had at least one hundred twenty (120) months of 22
service upon retirement, provided such retired member agrees to pay the 23
remaining fifty percent (50%) by payroll deduction from his or her 24
retirement allowance, electronic funds transfer, or by another method; or 25
4. Twenty-five percent (25%) of the monthly premium for single coverage 26
shall be paid for a retired member who had less than one hundred twenty 27
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(120) months of service but had at least forty-eight (48) months of 1
service upon retirement, provided such retired member agrees to pay the 2
remaining seventy-five percent (75%) by payroll deduction from his or 3
her retirement allowance, electronic funds transfer, or by another 4
method. 5
(c) Notwithstanding paragraph (b) of this subsection, for a member participating 6
in the system prior to July 1, 2003, who: 7
1. Dies as a direct result of an act in line of duty as defined in KRS 16.505 8
or dies as a result of a duty -related injury as defined in KRS 61.621, the 9
monthly premium shall be paid for his or her spouse so long as the 10
spouse remains eligible for a monthly retirement benefit; 11
2. Becomes totally and permanently disabled as defined in KRS 16.582 as 12
a direct result of an act in line of duty as defin ed in KRS 16.505 or 13
becomes disabled as a result of a duty -related injury as defined in KRS 14
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 15
monthly premium shall be paid for his or her spouse so long as the 16
member and the spouse i ndividually remain eligible for a monthly 17
retirement benefit; and 18
3. Dies as a direct result of an act in line of duty as defined in KRS 16.505, 19
dies as a result of a duty -related injury as defined in KRS 61.621, 20
becomes totally and permanently disabled as defined in KRS 16.582 as a 21
direct result of an act in line of duty as defined in KRS 16.505, or 22
becomes disabled as a result of a duty -related injury as defined in KRS 23
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 24
monthly premium shall be paid for each dependent child as defined in 25
KRS 16.505, so long as the member remains eligible for a monthly 26
retirement benefit, unless deceased, and each dependent child 27
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individually remains eligible under KRS 16.505. 1
(d) 1. For a member who b egan participating in the system prior to July 1, 2
2003, who was determined to be in a hazardous position in the Kentucky 3
Employees Retirement System or in a position in the State Police 4
Retirement System, or who is receiving a retirement allowance based on 5
General Assembly service, the funds specified under paragraph (a)2. of 6
this subsection shall also pay a percentage of the monthly contribution 7
rate sufficient to fund the premium costs for hospital and medical 8
insurance coverage for the spouse and for eac h dependent child of a 9
recipient. 10
2. The percentage of the monthly contribution rate paid for the spouse and 11
each dependent child of a recipient who was in a hazardous position or 12
who is receiving a retirement allowance based on General Assembly 13
service in accordance with subparagraph 1. of this paragraph shall be 14
based solely on the member's service in a hazardous position using the 15
formula in paragraph (b) of this subsection. 16
(e) For members who begin participating in the system on or after July 1, 2003: 17
1. Participation in the insurance benefits provided under this section shall 18
not be allowed until the member has earned at least one hundred twenty 19
(120) months of service in the state -administered retirement systems, 20
except that for members who begin part icipating in the system on or 21
after September 1, 2008, participation in the insurance benefits provided 22
under this section shall not be allowed until the member has earned at 23
least one hundred eighty (180) months of service credited under KRS 24
16.543(1) or 61.543(1), or another state-administered retirement system. 25
2. A member who meets the minimum service requirements as provided by 26
subparagraph 1. of this paragraph shall upon retirement be eligible for 27
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the following monthly contribution rate to be paid on his or her behalf, 1
or on behalf of the spouse or dependent of a member with service in a 2
hazardous position, from the funds specified under paragraph (a)2. of 3
this subsection: 4
a. For members with service in a nonhazardous position who do not 5
meet the career threshold, a monthly insurance contribution of ten 6
dollars ($10) for each year of service as a participating employee 7
in a nonhazardous position; 8
b. For members with service in a nonhazardous position who meet 9
the career threshold, a monthly insurance co ntribution towards 10
the health plans offered to retirees who are not eligible for 11
Medicare of forty dollars ($40) for each year of service as a 12
participating employee in a nonhazardous position and a 13
monthly insurance contribution towards the health plans o ffered 14
to retirees who are eligible for Medicare of ten dollars ($10) for 15
each year of service as a participating employee in a 16
nonhazardous position. The monthly insurance contribution 17
payable to retirees eligible for Medicare under this subdivision 18
shall be adjusted as necessary so that it is equivalent to the 19
monthly contribution amount computed under subdivision a. of 20
this subparagraph as adjusted by subparagraph 6.a. of this 21
paragraph; 22
c. For members with service in a hazardous position who do not 23
meet the career threshold or with service[who participate] in the 24
State Police Retirement System who do not meet the career 25
threshold, a monthly insurance contribution of fifteen dollars 26
($15) for each year of service as a participating employee in a 27
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hazardous position or the State Police Retirement System;[ and] 1
d. For members with service in a hazardous position who meet the 2
career threshold or with service in the State Police Retirement 3
System who meet the career threshold, a monthly insurance 4
contribution towards the health plans offered to retirees who are 5
not eligible for Medicare of fifty dollars ($50) for each year of 6
service as a participating employee in a hazardous position or 7
the State Police Retirement System and a monthly insurance 8
contribution towards the health plans offered to retirees who are 9
eligible for Medicare of fifteen dollars ($15) for each year of 10
service as a participating employee in a hazardous position or 11
the State Police Retirement System. The monthly insurance 12
contribution payable to retirees eligible for Medicare under this 13
subdivision shall be adjusted as necessary so that it is equivalent 14
to the monthly contribution amount computed under subdivision 15
c. of this subparagraph as adjusted by subparagraph 6.a. of this 16
paragraph; and 17
e.[c.] Upon the death 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 16.505, and the 26
member shall be entitled to the benefits payable under this subsection as 27
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though the member had twenty (20) years of service in a hazardous 1
position. 2
4. The minimum service required to participate in benefits as provided by 3
subparagraph 1. of this paragraph shall be waived for a member who is 4
disabled as a result of a duty -related injury as defined in KRS 61.621 5
and is eligible for the benefits provided by KRS 61.621(5)(b), and the 6
member shall be entitled to the benefits payable under this subsection as 7
though the member had twenty (20) years of service in a nonhazardous 8
position. 9
5. Notwithstanding the provisions of this paragraph, the minimum service 10
requirement to participate in benefits as provide d by subparagraph 1. of 11
this paragraph shall be waived for a for a member who dies as a direct 12
result of an act in line of duty as defined in KRS 16.505, who becomes 13
totally and permanently disabled as defined in KRS 16.582 as a direct 14
result of an act in line of duty as defined in KRS 16.505, who dies as a 15
result of a duty -related injury as defined in KRS 61.621, or who 16
becomes disabled as a result of a duty -related injury as defined in KRS 17
61.621 and is eligible for the benefits provided by KRS 61.621(5)( a), 18
and the premium for the member, the member's spouse, and for each 19
dependent child as defined in KRS 16.505 shall be paid in full by the 20
systems so long as the member, member's spouse, or dependent child 21
individually remains eligible for a monthly retirement benefit. 22
6. Except as provided by subparagraph 5. of this paragraph, the monthly 23
insurance contribution amount shall be increased: 24
a. On July 1 of each year by one and one -half percent (1.5%). The 25
increase shall be cumulative and shall continue to accrue after the 26
member's retirement for as long as a monthly insurance 27
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contribution is payable to the retired member or beneficiary but 1
shall not apply to any increase in the contribution attributable to 2
the increase specified by subdivision b. of this subparagraph; and 3
b. On January 1 of each year by five dollars ($5) for members who 4
have accrued an additional full year of service as a participat ing 5
employee beyond the career threshold, subject to the following 6
restrictions: 7
i. The additional insurance contribution provided by this 8
subdivision shall only be applied to the monthly contribution 9
amounts provided under subparagraph 2.b.[2.a.] and d.[b.] of 10
this paragraph; 11
ii. The additional insurance contribution provided by this 12
subdivision shall only be payable towards the health plans 13
offered by the system to retirees who are not eligible for 14
Medicare or for reimbursements provided to retirees not 15
eligible for Medicare pursuant to subsection (6)(a)2. of this 16
section; and 17
iii. In order for the annual increase to occur as provided by this 18
subdivision, the funding level of retiree health benefits for 19
the system in which the employee is receiving the add itional 20
insurance contribution shall be at least ninety percent (90%) 21
as of the most recent actuarial valuation and be projected by 22
the actuary to remain ninety percent (90%) for the year in 23
which the increase is provided. 24
7. The benefits of this paragraph provided to a member whose participation 25
begins on or after July 1, 2003, shall not be considered as benefits 26
protected by the inviolable contract provisions of KRS 16.652 or 27
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61.692. The General Assembly reserves the right to suspend or reduce 1
the benefit s conferred in this paragraph if in its judgment the welfare of 2
the Commonwealth so demands. 3
8. An employee whose membership date is on or after September 1, 2008, 4
who retires and is reemployed in a regular full -time position required to 5
participate in the system or the County Employees Retirement System 6
shall not be eligible for health insurance coverage or benefits provided 7
by this section and shall take coverage with his or her employing agency 8
during the period of reemployment in a regular full-time position. 9
9. For purposes of this paragraph: 10
a. "Career threshold" for a member with service in a nonhazardous 11
position means twenty -seven (27) years of service credited under 12
KRS 16.543(1), 61.543(1), 78.615(1), or another state -13
administered retirement system and for a member with service in a 14
hazardous position means the service requirements specified by 15
KRS 16.577(2) or (3) or 16.583(6)(b), as applicable; and 16
b. "Funding level" means the actuarial value of assets divided by the 17
actuarially accrued liabilit y expressed as a percentage that is 18
determined and reported by the system's actuary in the annual 19
actuarial valuation. 20
(f) For members with service in another state -administered retirement system 21
who select hospital and medical insurance plan coverage through the system: 22
1. The system shall compute the member's combined service, including 23
service credit in another state -administered retirement system, and 24
calculate the portion of the member's premium monthly contribution rate 25
to be paid by the funds specified under paragraph (a)2. of this subsection 26
according to the criteria established in paragraphs (a) to (e) of this 27
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subsection. Each state -administered retirement system shall pay 1
annually to the insurance trust fund established under KRS 61.701 the 2
portion of the system's cost of the retiree's monthly contribution for 3
single coverage for hospital and medical insurance plan which shall be 4
equal to the percentage of the member's number of months of service in 5
the other state -administered retirement plan divi ded by his or her total 6
combined service and in conjunction with the reciprocal agreement 7
established between the system and the other state -administered 8
retirement systems. The amounts paid by the other state -administered 9
retirement plans and by the Kentu cky Retirement Systems from funds 10
specified under paragraph (a)2. of this subsection shall not be more than 11
one hundred percent (100%) of the monthly contribution adopted by the 12
respective boards of trustees; 13
2. A member may not elect coverage for hospital and medical benefits 14
through more than one (1) of the state -administered retirement systems; 15
and 16
3. A state -administered retirement system shall not pay any portion of a 17
member's monthly contribution for medical insurance unless the 18
member is a recipient or annuitant of the plan. 19
(5) Premiums paid for hospital and medical insurance coverage procured under 20
authority of this section shall be exempt from any premium tax which might 21
otherwise be required under KRS Chapter 136. The payment of premiums by the 22
funds described by subsection (4)(a)2. of this section shall not constitute taxable 23
income to an insured recipient. No commission shall be paid for hospital and 24
medical insurance procured under authority of this section. 25
(6) (a) The board shall promulgate an administrative regulation to establish a medical 26
insurance reimbursement plan to provide reimbursement for hospital and 27
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medical insurance plan premiums of recipients of a retirement allowance who: 1
1. Are not eligible for the same level of hospital and med ical benefits as 2
recipients living in Kentucky and having the same Medicare hospital 3
and medical insurance eligibility status; or 4
2. Are eligible for retiree health subsidies as provided by subsection (4)(e) 5
of this section, except for those recipients eli gible for full premium 6
subsidies under subsection (4)(e)5. of this section. The reimbursement 7
program as provided by this subparagraph shall be available to the 8
recipient regardless of the hospital and medical insurance plans offered 9
by the systems. 10
(b) An eligible recipient shall file proof of payment for hospital and medical 11
insurance plan coverage with the retirement office. Reimbursement to eligible 12
recipients shall be made on a quarterly basis. The recipient shall be eligible 13
for reimbursement of subst antiated medical insurance premiums paid by the 14
recipient to obtain coverage for an amount not to exceed the total monthly 15
contribution rate determined under subsection (4) of this section. For 16
reimbursements provided under paragraph (a)2. of this subsecti on, the full 17
subsidy under subsection (4)(e)2. of this section shall be reimbursed by the 18
system to the recipient up to the amount individually paid by the recipient to 19
obtain coverage. In the case of recipients of a retirement allowance from a 20
nonhazardous position, the reimbursement shall be limited to the amount 21
paid by the recipient to obtain single coverage. 22
(c) For purposes of recipients described by paragraph (a)1. of this subsection, the 23
plan shall not be made available if all recipients are eligibl e for the same 24
coverage as recipients living in Kentucky. 25
Section 2. The Public Pension Oversight Board shall continue to monitor the 26
actuarial data of the Kentucky Employees Retirement System and State Police 27
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Retirement System retiree health funds and shall, during the 2026 Interim, evaluate 1
potential legislative options to adjust retiree health benefits and costs for those members 2
who began participating in the system on or after July 1, 2003, in the event the retiree 3
health funds continue to see actuarial improvement. 4
Section 3. The amendments to the employee contribution provisions specified 5
in subsection (3)(b) of Section 1 of this Act shall apply to employee contributions 6
payable on or after July 1, 2027. 7
Section 4. The amendments to the monthly insurance contribution amounts 8
specified in subsection (4)(e)2. of Section 1 of this Act shall: 9
(1) Be payable prospectively for insurance premiums for h ealth plans beginning 10
on or after January 1, 2027; 11
(2) Be increased annually after January 1, 2027, in accordance with subsection 12
(4)(e)6.a. of Section 1 of this Act; and 13
(3) For purposes of calculating the amounts that become payable on or after 14
January 1, 2027, apply to the service as a participating employ ee accrued on or after July 15
1, 2003, for covered members and retirees, regardless of retirement date. 16