AN ACT relating to retired emergency personnel.

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AN ACT relating to retired emergency personnel. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 65 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Employer" means: 6
1. Any incorporated city, consolidated local government, unified local 7
government, urban-county government, or charter co unty government 8
operating under the laws of this Commonwealth, and the offices and 9
agencies thereof; or 10
2. A fire protection district organized under KRS Chapter 75; and 11
(b) "Firefighter" means any member of a paid: 12
1. Municipal fire department organized under KRS Chapter 67A, 67C, or 13
95; or 14
2. Fire protection district organized under KRS Chapter 75. 15
(2) Subject to the limitations in subsection (7) of this section, an employer may 16
employ individuals as firefighters under this section who have retired from the 17
Kentucky Employees Retirement System, the County Employees Retirement 18
System, or the State Police Retirement System. 19
(3) To be eligible for employment under this section, an individual shall have: 20
(a) Participated in the Firefighters Foundation Program fund under KRS 21
95A.200 to 95A.300, or retired as a firefighter under KRS Chapter 95; 22
(b) Retired with at least twenty (20) years of service credit; 23
(c) Been separated from service for the period required in KRS 61.637 a nd 24
78.5540 so that the member's retirement is not voided; 25
(d) Retired with no administrative charges pending; 26
(e) Retired with no preexisting agreement between the individual and the 27
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employer prior to the individual's retirement for the individual to retur n to 1
work for the employer; and 2
(f) Successfully completed a Candidate Physical Ability Test (CPAT) prior to 3
reemployment if the individual has not served as a firefighter for one (1) 4
year or more as of the date of reemployment. 5
(4) Individuals employed under this section shall: 6
(a) Be employed for a period not to exceed one (1) year. The one (1) year 7
employment period may be renewed annually at the discretion of the 8
employer; 9
(b) Receive compensation according to the standard procedures applicable to 10
the employer; and 11
(c) Be employed based upon need as determined by the employer. 12
(5) Notwithstanding any provisions of KRS 16.505 to 16.652, 18A.225 to 18A.2287, 13
61.510 to 61.705, or 78.510 to 78.852 to the contrary: 14
(a) Individuals employed under this section shall continue to receive all 15
retirement and health insurance benefits to which they were entitled upon 16
retiring in the applicable system administered by Kentucky Retirement 17
Systems or the County Employees Retirement System; 18
(b) Except as provided in paragraph (e) of this subsection, individuals employed 19
under this section shall not be eligible to receive health insurance coverage 20
through the employer; 21
(c) The employer shall pay the employer's normal cost contribution as defined 22
by KRS 78.635 on any firefighter employed in a regular full-time position as 23
defined by KRS 78.510, but shall not pay any other employer contributions 24
or retiree health expense reimbursements to the Kentucky Retirement 25
Systems or County Employees Retirement System required by KRS 26
61.637(17) or 78.5540(4) for individuals employed under this section; 27
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(d) Except as provided in paragraph (e) of this subsection, the employer shall 1
not pay any insurance contributions to the Kentucky Employees Health 2
Plan as provided by KRS 18A.225 to 18A.22 87 for individuals employed 3
under this section; and 4
(e) The legislative body of the employer may by legislative action provide or 5
authorize provision of health insurance coverage for individuals employed 6
under this section, subject to the terms and conditi ons established by the 7
employer. 8
(6) Individuals employed under this section shall be subject to any merit system, civil 9
service, or other legislative due process provisions applicable to the employer. A 10
decision not to renew a one (1) year employment term under this section shall not 11
be considered a disciplinary action or deprivation subject to due process. 12
(7) An employer shall be limited in the number of retired firefighters that it may 13
employ under this section as follows: 14
(a) An employer that employed an average of five (5) or fewer firefighters over 15
the course of the immediately preceding calendar year shall not be limited 16
in the number of firefighters that it may employ under this section; 17
(b) An employer that employed an average of more than five (5) but fewer than 18
one hundred (100) firefighters over the course of the immediately preceding 19
calendar year shall not employ more than five (5) firefighters under this 20
section, or a number equal to twenty -five percent (25%) of the firefighters 21
employed by th e employer in the immediately preceding calendar year, 22
whichever is greater; and 23
(c) An employer that employed an average of one hundred (100) or more 24
firefighters over the course of the immediately preceding calendar year shall 25
not employ more than twenty -five (25) firefighters under this section, or a 26
number equal to ten percent (10%) of the firefighters employed by the 27
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employer in the immediately preceding calendar year, whichever is greater. 1
Section 2. KRS 61.637 is amended to read as follows: 2
(1) A retired member who is receiving monthly retirement payments under any of the 3
provisions of KRS 61.510 to 61.705 and 78.510 to 78.852 and who is reemployed 4
as an employee by a participating agency prior to August 1, 1998, shall have his or 5
her retirement payments suspended for the duration of reemployment. Monthly 6
payments shall not be suspended for a retired member who is reemployed if he or 7
she anticipates that he or she will receive less than the maximum permissible 8
earnings as provided by the Federal Social Security Act in compensation as a result 9
of reemployment during the calendar year. The payments shall be suspended at the 10
beginning of the month in which the reemployment occurs. 11
(2) Employer and employee contributions shall be made as provided in KRS 61.510 to 12
61.705 and 78.510 to 78.852 on the compensation paid during reemployment, 13
except where monthly payments were not suspended as provided in subsection (1) 14
of this section or would not increase the retired member's last monthly retirement 15
allowance by at least one dollar ($1), and the member shall be credited with 16
additional service credit. 17
(3) In the month following the termination of reemployment, retirement allowance 18
payments shall be reinstated under the plan under which the member was receiving 19
payments prior to reemployment. 20
(4) (a) Notwithstanding the provisions of this section, the payments suspended in 21
accordance with subsection (1) of this section shall be paid retroactively to the 22
retired member, or his or her estate, if he or she does not receive more than 23
the maximum permissible earnings as provided by the Federal Social Security 24
Act in compensation from participating agencies during any calendar year of 25
reemployment. 26
(b) If the retired m ember is paid suspended payments retroactively in accordance 27
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with this section, employee contributions deducted during his or her period of 1
reemployment, if any, shall be refunded to the retired employee, and no 2
service credit shall be earned for the period of reemployment. 3
(c) If the retired member is not eligible to be paid suspended payments for his or 4
her period of reemployment as an employee, his or her retirement allowance 5
shall be recomputed under the plan under which the member was receiving 6
payments prior to reemployment as follows: 7
1. The retired member's final compensation shall be recomputed using 8
creditable compensation for his or her period of reemployment; 9
however, the final compensation resulting from the recalculation shall 10
not be less than that of the member when his or her retirement allowance 11
was last determined; 12
2. If the retired member initially retired on or subsequent to his or her 13
normal retirement date, his or her retirement allowance shall be 14
recomputed by using the formula in KRS 61.595(1); 15
3. If the retired member initially retired prior to his or her normal 16
retirement date, his or her retirement allowance shall be recomputed 17
using the formula in KRS 61.595(2), except that the member's age used 18
in computing benefits shall be his or her age at the time of his or her 19
initial retirement increased by the number of months of service credit 20
earned for service performed during reemployment; 21
4. The retirement allowance payments resulting from the recomputation 22
under this subsection shall be payable in the month following the 23
termination of reemployment in lieu of payments under subparagraph 3. 24
of this paragraph. The member shall not receive less in benefits as a 25
result of the recomputation than he or she was receiving prior to 26
reemployment or would receive as determined under KRS 61.691; and 27
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5. Any retired member who was reemployed prior to March 26, 1974, shall 1
begin making contributions to the system in accordance with the 2
provisions of this section on the first day of the month following M arch 3
26, 1974. 4
(5) A retired member, or his or her estate, shall pay to the retirement fund the total 5
amount of payments which are not suspended in accordance with subsection (1) of 6
this section if the member received more than the maximum permissible earnings as 7
provided by the Federal Social Security Act in compensation from participating 8
agencies during any calendar year of reemployment, except the retired member or 9
his or her estate may repay the lesser of the total amount of payments which were 10
not sus pended or fifty cents ($0.50) of each dollar earned over the maximum 11
permissible earnings during reemployment if under age sixty -five (65), or one 12
dollar ($1) for every three dollars ($3) earned if over age sixty-five (65). 13
(6) (a) As used in this section, "reemployment" or "reinstatement" [ as used in this 14
section] shall not include a retired member who has been ordered reinstated 15
by the Personnel Board under authority of KRS 18A.095. 16
(b) 1. A retired member who has been ordered reinstated without loss of p ay 17
by the Personnel Board under authority of KRS 18A.095 or by court 18
order or by order of the Kentucky Commission on Human Rights and 19
accepts employment by an agency participating in the Kentucky 20
Employees Retirement System, State Police Retirement System, or 21
County Employees Retirement System shall void his or her retirement 22
by reimbursing the system in the full amount of his or her retirement 23
allowance payments received, including any health insurance benefits 24
paid to or on behalf of the member. 25
2. Within twelve (12) months of the date of the final order of the Personnel 26
Board, the Kentucky Commission on Human Rights, or the court, the 27
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member shall repay the system the full amount of his or her retirement 1
allowance payments and health insurance benefits by lump sum or enter 2
into an agreement with the Authority for repayment by installments. 3
3. Once the system has been fully reimbursed for the benefits paid to the 4
member and on the member's behalf, additional contributions and 5
service credit based on the re instated employment shall be added to the 6
member's account. 7
(7) (a) Effective August 1, 1998, the provisions of subsections (1) to (4) of this 8
section shall no longer apply to a retired member who is reemployed in a 9
position covered by the same retirement system from which the member 10
retired. Reemployed retired members shall be treated as new members upon 11
reemployment. Any retired member whose reemployment date preceded 12
August 1, 1998, who does not elect, within sixty (60) days of notification by 13
the retirement systems, to remain under the provisions of subsections (1) to 14
(4) of this section shall be deemed to have elected to participate under this 15
subsection. 16
(b) A retired member whose disability retirement was discontinued pursuant to 17
KRS 61.615 and who is reemployed in one (1) of the systems administered by 18
the Kentucky Retirement Systems or County Employees Retirement System 19
prior to his or her normal retirement date shall have his or her accounts 20
combined upon termination for determining eligibility for benefits. If the 21
member is eligible for retirement, the member's service and creditable 22
compensation earned as a result of his or her reemployment shall be used in 23
the calculation of benefits, except that the member's final compensation shall 24
not be less t han the final compensation last used in determining his or her 25
retirement allowance. The member shall not change beneficiary or payment 26
option designations. This provision shall apply to members reemployed on or 27
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after August 1, 1998. 1
(8) If a retired membe r accepts employment or begins serving as a volunteer with an 2
employer participating in the systems administered by Kentucky Retirement 3
Systems or County Employees Retirement System within twelve (12) months of his 4
or her retirement date, the retired membe r shall notify the Authority and the 5
participating employer shall submit the information required or requested by the 6
Authority to confirm the individual's employment or volunteer status. The retired 7
member shall not be required to notify the Authority reg arding any employment or 8
volunteer service with a participating agency that is accepted after twelve (12) 9
months following his or her retirement date. 10
(9) If the retired member is under a contract to provide services as an independent 11
contractor or leased employee to an employer participating in the systems 12
administered by Kentucky Retirement Systems or County Employees Retirement 13
System within twelve (12) months of his or her retirement date, the member shall 14
submit a copy of that contract to the Authority , and the Authority shall determine if 15
the member is an independent contractor or leased employee for purposes of 16
retirement benefits. The retired member and the participating employer shall submit 17
the information required or requested by the Authority to confirm the individual's 18
status as an independent contractor or leased employee. The retired member shall 19
not be required to notify the Authority regarding any services entered into as an 20
independent contractor or leased employee with a participating agenc y that the 21
employee enters into after twelve (12) months following his or her retirement date. 22
(10) If a member is receiving a retirement allowance, or has filed the forms required for 23
a retirement allowance, and is employed within one (1) month of the mem ber's 24
initial retirement date in a position that is required to participate in the same 25
retirement system from which the member retired, the member's retirement shall be 26
voided and the member shall repay to the retirement system all benefits received. 27
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The member shall contribute to the member account established for him or her prior 1
to his or her voided retirement. The retirement allowance for which the member 2
shall be eligible upon retirement shall be determined by total service and creditable 3
compensation. 4
(11) (a) If a member of the Kentucky Employees Retirement System retires from a 5
department which participates in more than one (1) retirement system and is 6
reemployed within one (1) month of his or her initial retirement date by the 7
same department in a position participating in another retirement system, the 8
retired member's retirement allowance shall be suspended for the first month 9
of his or her retirement, and the member shall repay to the retirement system 10
all benefits received for the month. 11
(b) A r etired member of the County Employees Retirement System who after 12
initial retirement is hired by the county from which the member retired shall 13
be considered to have been hired by the same employer. 14
(12) (a) If a hazardous member who retired prior to age fifty -five (55), or a 15
nonhazardous member who retired prior to age sixty -five (65), is reemployed 16
within six (6) months of the member's termination by the same employer, the 17
member shall obtain from his or her previous and current employers a copy of 18
the job description established by the employers for the position and a 19
statement of the duties performed by the member for the position from which 20
he or she retired and for the position in which he or she has been reemployed. 21
(b) The job descriptions and statements of duties shall be filed with the retirement 22
office. 23
(13) If the retirement system determines that the retired member has been employed in a 24
position with the same principal duties as the position from w hich the member 25
retired: 26
(a) The member's retirement allowance shall be suspended during the period that 27
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begins on the month in which the member is reemployed and ends six (6) 1
months after the member's termination; 2
(b) The retired member shall repay to the retirement system all benefits paid from 3
systems administered by Kentucky Retirement Systems or County Employees 4
Retirement System under reciprocity, including medical insurance benefits, 5
that the member received after reemployment began; 6
(c) Upon termina tion, or subsequent to expiration of the six (6) month period 7
from the date of termination, the retired member's retirement allowance based 8
on his or her initial retirement account shall no longer be suspended, and the 9
member shall receive the amount to wh ich he or she is entitled, including an 10
increase as provided by KRS 61.691; 11
(d) Except as provided in subsection (7) of this section, if the position in which a 12
retired member is employed after initial retirement is a regular full -time 13
position, the retire d member shall contribute to a second member account 14
established for him or her in the retirement system. Service credit gained after 15
the member's date of reemployment shall be credited to the second member 16
account; and 17
(e) Upon termination, the retired me mber shall be entitled to benefits payable 18
from his or her second retirement account. 19
(14) (a) If the retirement system determines that the retired member has not been 20
reemployed in a position with the same principal duties as the position from 21
which he or she retired, the retired member shall continue to receive his or her 22
retirement allowance. 23
(b) If the position is a regular full -time position, the member shall contribute to a 24
second member account in the retirement system. 25
(15) (a) If a retired member i s reemployed at least one (1) month after initial 26
retirement in a different position, or at least six (6) months after initial 27
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retirement in the same position, and prior to normal retirement age, the retired 1
member shall contribute to a second member accou nt in the retirement system 2
and continue to receive a retirement allowance from the first member account. 3
(b) Service credit gained after reemployment shall be credited to the second 4
member account. Upon termination, the retired member shall be entitled to 5
benefits payable from the second member account. 6
(16) A retired member who is reemployed and contributing to a second member account 7
shall not be eligible to purchase service credit under any of the provisions of KRS 8
16.505 to 16.652, 61.510 to 61.705, or 78.510 to 78.852 which he or she was 9
eligible to purchase prior to his or her initial retirement. 10
(17) Notwithstanding any provision of subsections (1) to (7)(a) and (10) to (15) of this 11
section, the following shall apply to retired members who are reempl oyed by an 12
agency participating in one (1) of the systems administered by Kentucky 13
Retirement Systems or County Employees Retirement System on or after 14
September 1, 2008: 15
(a) If a member is receiving a retirement allowance from one (1) of the systems 16
administered by Kentucky Retirement Systems or County Employees 17
Retirement System, or has filed the forms required to receive a retirement 18
allowance from one (1) of the systems administered by Kentucky Retirement 19
Systems or County Employees Retirement System, a nd is employed in a 20
regular full -time position required to participate in one (1) of the systems 21
administered by Kentucky Retirement Systems or County Employees 22
Retirement System or is employed in a position that is not considered regular 23
full-time with an agency participating in one (1) of the systems administered 24
by Kentucky Retirement Systems or County Employees Retirement System 25
within one (1) month following the member's initial retirement date, the 26
member's retirement shall be voided, and the member s hall repay to the 27
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retirement system all benefits received, including any health insurance 1
benefits. If the member is returning to work in a regular full -time position 2
required to participate in one (1) of the systems administered by Kentucky 3
Retirement Systems: 4
1. The member shall contribute to a member account established for him or 5
her in one (1) of the systems administered by Kentucky Retirement 6
Systems or County Employees Retirement System, and employer 7
contributions shall be paid on behalf of the membe r by the participating 8
employer; and 9
2. Upon subsequent retirement, the member shall be eligible for a 10
retirement allowance based upon total service and creditable 11
compensation, including any additional service or creditable 12
compensation earned after his or her initial retirement was voided; 13
(b) If a member is receiving a retirement allowance from one (1) of the systems 14
administered by Kentucky Retirement Systems or County Employees 15
Retirement System and is employed in a regular full -time position required to 16
participate in one (1) of the systems administered by Kentucky Retirement 17
Systems or County Employees Retirement System after a one (1) month 18
period following the member's initial retirement date, the member may 19
continue to receive his or her retirement allowance during the period of 20
reemployment subject to the following provisions: 21
1. If a member is reemployed by a participating agency within twelve (12) 22
months of the member's retirement date, the participating agency shall 23
certify in writing on a form prescribed by the Authority that no 24
prearranged agreement existed between the employee and agency prior 25
to the employee's retirement for the employee to return to work with the 26
participating agency. If an elected official is reelected to a new term of 27
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office in the same position as the elected official held prior to retirement 1
and takes office within twelve (12) months of his or her retirement date, 2
he or she shall be deemed by the Authority as having a prearranged 3
agreement under the provisions of this sub paragraph and shall have his 4
or her retirement voided. If the participating agency fails to complete the 5
certification, the member's retirement shall be voided and the provisions 6
of paragraph (a) of this subsection shall apply to the member and the 7
employer. Employment that is accepted by the retired member after 8
twelve (12) months following the member's retirement date shall not 9
constitute a prearranged agreement under this paragraph; 10
2. Notwithstanding any other provision of KRS Chapter 16, 61, or 78 to 11
the contrary, the member shall not contribute to the systems and shall 12
not earn any additional benefits for any work performed during the 13
period of reemployment; 14
3. Except as provided by KRS 70.291 to 70.293, 95.022, Section 1 of this 15
Act, and 164.952 and e xcept for any retiree employed as a school 16
resource officer as defined by KRS 158.441 or as a Kentucky guardian 17
as defined by KRS 158.4431, the employer shall pay employer 18
contributions as specified by KRS 61.565, 61.702, and 78.635, as 19
applicable, on all creditable compensation earned by the employee 20
during the period of reemployment. The additional contributions paid 21
shall be used to reduce the unfunded actuarial liability of the systems; 22
and 23
4. Except as provided by KRS 70.291 to 70.293, 95.022, Section 1 of this 24
Act, and 164.952 and except for any retiree employed as a school 25
resource officer as defined by KRS 158.441 or as a Kentucky guardian 26
as defined by KRS 158.4431, the employer shall be required to 27
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reimburse the systems for the cost of the health i nsurance premium paid 1
by the systems to provide coverage for the retiree, not to exceed the cost 2
of the single premium. Effective July 1, 2015, local school boards shall 3
not be required to pay the reimbursement required by this subparagraph 4
for retirees employed by the board for eighty (80) days or less during the 5
fiscal year. Effective August 1, 2024, the Department of Education shall 6
pay for the health reimbursements required by this subparagraph for a 7
retiree who participated in a hazardous position prio r to July 1, 2003, in 8
one (1) of the systems administered by the Kentucky Retirement 9
Systems or the County Employees Retirement System, and who is 10
reemployed by a local school board; 11
(c) Notwithstanding paragraphs (a) and (b) of this subsection, a retired member 12
who qualifies as a volunteer for an employer participating in one (1) of the 13
systems administered by Kentucky Retirement Systems or County Employees 14
Retirement System and who is receiving reimbursement of actual expenses, a 15
nominal fee for his or he r volunteer services, or both, shall not be considered 16
an employee of the participating employer and shall not be subject to 17
paragraphs (a) and (b) of this subsection if: 18
1. Prior to the retired member's most recent retirement date, he or she did 19
not receive creditable compensation from the participating employer in 20
which the retired member is performing volunteer services; 21
2. Any reimbursement or nominal fee received prior to the retired 22
member's most recent retirement date has not been credited as credita ble 23
compensation to the member's account or utilized in the calculation of 24
the retired member's benefits; 25
3. The retired member has not purchased or received service credit under 26
any of the provisions of KRS 61.510 to 61.705 or 78.510 to 78.852 for 27
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service with the participating employer for which the retired member is 1
performing volunteer services; and 2
4. Other than the status of volunteer, the retired member does not become 3
an employee, leased employee, or independent contractor of the 4
employer for which he or she is performing volunteer services for a 5
period of at least twelve (12) months following the re tired member's 6
most recent retirement date. 7
If a retired member, who provided volunteer services with a participating 8
employer under this paragraph violates any provision of this paragraph, then 9
he or she shall be deemed an employee of the participating e mployer as of the 10
date he or she began providing volunteer services and both the retired member 11
and the participating employer shall be subject to paragraphs (a) and (b) of 12
this subsection for the period of volunteer service; 13
(d) Notwithstanding any provision of this section, any mayor or member of a city 14
legislative body shall not be required to resign from his or her position as 15
mayor or as a member of the city legislative body in order to begin drawing 16
benefits from the systems administered by Kentucky R etirement Systems or 17
subject to any provision of this section as it relates solely to his or her service 18
as a mayor or member of the city legislative body if the mayor or member of a 19
city legislative body: 20
1. Has not participated in the County Employees Re tirement System prior 21
to retirement, but is otherwise eligible to retire from the Kentucky 22
Employees Retirement System or the State Police Retirement System; or 23
2. Has been or is participating in the County Employees Retirement 24
System and is at least sixty-two (62) years of age. If a mayor or member 25
of a city legislative body who is at least sixty -two (62) years of age 26
retires from the systems administered by Kentucky Retirement Systems 27
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but remains in office after his or her effective retirement date, the m ayor 1
or member of the city legislative body shall not accrue any further 2
service credit or benefits in the systems administered by Kentucky 3
Retirement Systems for any employment occurring on or after the 4
effective retirement date; 5
(e) Notwithstanding any provision of this section, any current or future part -time 6
adjunct instructor for the Kentucky Fire Commission who has not participated 7
in the Kentucky Employees Retirement System prior to retirement, but who is 8
otherwise eligible to retire from the County Employees Retirement System, 9
shall not be: 10
1. Required to resign from his or her position as a part -time adjunct 11
instructor for the Kentucky Fire Commission in order to begin drawing 12
benefits from the County Employees Retirement System; or 13
2. Subject to an y provision of this section as it relates solely to his or her 14
service as a part -time adjunct instructor for the Kentucky Fire 15
Commission; 16
(f) If a member is receiving a retirement allowance from any of the retirement 17
systems administered by the Kentucky R etirement Systems or County 18
Employees Retirement System and enters into a contract or becomes a leased 19
employee of an employer under contract with an employer participating in 20
one (1) of the systems administered by the Kentucky Retirement Systems or 21
County Employees Retirement System: 22
1. At any time following retirement, if the Authority determines the 23
employment arrangement does qualify as an independent contractor or 24
leased employee, the member may continue to receive his or her 25
retirement allowance during the period of the contract; 26
2. Within one (1) month following the member's initial retirement date, if 27
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the Authority determines the employment arrangement does not qualify 1
as an independent contractor or leased employee, the member's 2
retirement shall be voided in accordance with paragraph (a) of this 3
subsection; 4
3. After one (1) month but within twelve (12) months following the 5
member's initial retirement, if the Authority determines the employment 6
arrangement does not qualify as an independent contractor or leased 7
employee and that a prearranged agreement existed between the member 8
and the agency for the member to return to work with the agency, the 9
member's retirement shall be voided in accordance with paragraph (a) of 10
this subsection; 11
4. After a twelve (12) month period following the member's initial 12
retirement, the member may continue to receive his or her retirement 13
allowance during the period of the contract and the member shall not be 14
required to notify the system or submit any documentation for purp oses 15
of this section to the system; and 16
5. After twelve (12) months or more following the retired member's 17
retirement date, the initiation of a contract or the initial date of the 18
leased employment of a retired member by a participating agency shall 19
not constitute a prearranged agreement under this subsection; and 20
(g) The Authority shall issue a final determination regarding a certification of the 21
absence of a prearranged agreement or the retired member's qualification as 22
an independent contractor or leased employee as required under this section 23
no later than thirty (30) days after the retired member and participating 24
employer provide all required forms and additional information required by 25
the Authority. 26
(18) The Authority shall promulgate administrative regulations to implement the 27
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requirements of this section, including incorporating by reference board -prescribed 1
forms that a retired member and participating agency shall provide the systems 2
under subsections (8), (9), and (17) of this section. 3
Section 3. KRS 61.702 is amended to read as follows: 4
(1) As used in[For purposes of] this section: 5
(a) "Hospital and medical insurance plan" may include, at the board's discretion, 6
any one (1) or more of the following: 7
1. Any hosp ital and medical expense policy or certificate, provider -8
sponsored integrated health delivery network, self -insured medical plan, 9
health maintenance organization contract, or other health benefit plan; 10
2. Any health savings account as permitted by 26 U.S.C . sec. 223 or health 11
reimbursement arrangement or a similar account as may be permitted by 12
26 U.S.C. sec. 105 or 106. Such arrangement or account, at the board's 13
discretion, may reimburse any medical expense permissible under 26 14
U.S.C. sec. 213; or 15
3. A me dical insurance reimbursement program established by the board 16
through the promulgation of administrative regulation under which 17
members purchase individual health insurance coverage through a health 18
insurance exchange established under 42 U.S.C. sec. 18031 or 18041; 19
(b) "Monthly contribution rate" is the amount determined by the board based 20
upon the requirements of subsection (4)(a) to (d) of this section, except that 21
for members who began participating in the system on or after July 1, 2003, 22
the term shal l mean the amount determined in subsection (4)(e) of this 23
section; and 24
(c) "Months of service" means the total months of combined service used to 25
determine benefits under the system, except service added to determine 26
disability benefits or service otherwis e prohibited from being used to 27
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determine retiree health benefits under KRS 16.505 to 16.652 or 61.510 to 1
61.705 shall not be counted as "months of service." For current and former 2
employees of the Council on Postsecondary Education who were employed 3
prior to January 1, 1993, and who earn at least fifteen (15) years of service 4
credit in the Kentucky Employees Retirement System, "months of service" 5
shall also include vested service in another retirement system other than the 6
Kentucky Teachers' Retirement Sys tem sponsored by the Council on 7
Postsecondary Education. 8
(2) (a) 1. The board of trustees of the system shall arrange by appropriate contract 9
or on a self -insured basis to provide a group hospital and medical 10
insurance plan coverage for: 11
a. Present and future recipients of a retirement allowance from the 12
Kentucky Employees Retirement System and the State Police 13
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, or 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 eligible 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 insuranc e 5
eligibility status. Notwithstanding the provisions of any other statute 6
except subparagraph 3.b. of this paragraph, system recipients shall be 7
included in the same class as current state employees for purposes of 8
determining medical insurance policies an d 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 of fered 16
by 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 coverage 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 from 26
offering or which does not offer a hospital and medical benefit to 27
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the recipient as a condition of reemployment under KRS 70.293, 1
95.022, Section 1 of this Act , or 164.952. Individuals who are 2
eligible, pursuant to this subdivision, to be included in the 3
Kentucky Employees Health Plan as provided by KRS 18A.225 to 4
18A.2287 may be rated as a separate class from other eligible 5
employees and retirees for the purpos e of determining medical 6
insurance premiums. 7
(c) For recipients of a retirement allowance who are not eligible for the same 8
level of hospital and medical benefits as recipients living in Kentucky having 9
the same Medicare hospital and medical insurance elig ibility status, the board 10
shall provide a medical insurance reimbursement plan as described in 11
subsection (6) of this section. 12
(d) Notwithstanding anything in KRS Chapter 16 or 61 to the contrary, the board 13
of trustees, in its discretion, may take necessar y steps to ensure compliance 14
with 42 U.S.C. sec.[secs.] 300bb-1 et seq. 15
(3) (a) Each employer participating in the Kentucky Employees Retirement System 16
or the State Police Retirement System as provided in KRS 16.505 to 16.652 or 17
61.510 to 61.705 shall contribute to the insurance trust fund established under 18
KRS 61.701 the amount necessary to provide the monthly contribution rate as 19
provided for under this section. Such employer contribution rate shall be 20
developed by appropriate actuarial method as a part o f the determination of 21
each respective employer contribution rate determined under KRS 61.565. 22
(b) 1. Each employer described in paragraph (a) of this subsection shall deduct 23
from the creditable compensation of each member whose membership 24
date begins on o r after September 1, 2008, an amount equal to one 25
percent (1%) of the member's creditable compensation. The deducted 26
amounts shall, at the discretion of the board, be credited to accounts 27
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established pursuant to 26 U.S.C. sec. 401(h), within the funds 1
established in KRS 16.510 and 61.515, or the insurance trust fund 2
established under KRS 61.701. Notwithstanding the provisions of this 3
paragraph, a transfer of assets between the accounts established pursuant 4
to 26 U.S.C. sec. 401(h), within the funds establis hed in KRS 16.510 5
and 61.515, and the insurance trust fund established under KRS 61.701 6
shall not be allowed. 7
2. The employer shall file the contributions as provided by subparagraph 1. 8
of this paragraph at the retirement office in accordance with KRS 9
61.675. Any interest or penalties paid on any delinquent contributions 10
shall be credited to accounts established pursuant to 26 U.S.C. sec. 11
401(h), within the funds established in KRS 16.510 and 61.515, or the 12
insurance trust fund established under KRS 61.701. Notwithstanding 13
any minimum compensation requirements provided by law, the 14
deductions provided by this paragraph shall be made, and the 15
compensation of the member shall be reduced accordingly. 16
3. Each employer shall submit payroll reports, contributions lists, and other 17
data as may be required by administrative regulation promulgated by the 18
board of trustees in accordance with[pursuant to] KRS Chapter 13A. 19
4. Every member shall be deemed to consent and agree to the deductions 20
made pursuant to this paragrap h, and the payment of salary or 21
compensation less the deductions shall be a full and complete discharge 22
of all claims for services rendered by the person during the period 23
covered by the payment, except as to any benefits provided by KRS 24
16.505 to 16.652 or 61.510 to 61.705. No member may elect whether to 25
participate in, or choose the contribution amount to accounts established 26
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 27
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16.510 and 61.515, or the insurance trust fund established un der KRS 1
61.701. The member shall have no option to receive the contribution 2
required by this paragraph directly instead of having the contribution 3
paid to accounts established pursuant to 26 U.S.C. sec. 401(h) within the 4
funds established in KRS 16.510 and 61.515, or the insurance trust fund 5
established under KRS 61.701. No member may receive a rebate or 6
refund of contributions. If a member establishes a membership date 7
prior to September 1, 2008, pursuant to KRS 61.552(2) or (3), then this 8
paragraph shall not apply to the member and all contributions previously 9
deducted in accordance with this paragraph shall be refunded to the 10
member without interest. The contribution made pursuant to this 11
paragraph shall not act as a reduction or offset to any other contr ibution 12
required of a member or recipient under KRS 16.505 to 16.652 or 13
61.510 to 61.705. 14
5. The board of trustees, at its discretion, may direct that the contributions 15
required by this paragraph be accounted for within accounts established 16
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 17
16.510 and 61.515, or the insurance trust fund established under KRS 18
61.701, through the use of separate accounts. 19
(4) (a) The premium required to provide hospital and medical insurance plan 20
coverage u nder this section shall be paid wholly or partly from funds 21
contributed by: 22
1. The recipient of a retirement allowance, by payroll deduction from his 23
or her retirement allowance, or by other method; 24
2. The insurance trust fund established under KRS 61.701 or accounts 25
established pursuant to 26 U.S.C. sec. 401(h) within the funds 26
established in KRS 16.510 and 61.515; 27
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3. Another state -administered retirement system, including the County 1
Employees Retirement System, under a reciprocal arrangement, except 2
that any portion of the premium paid from the funds specified by 3
subparagraph 2. of this paragraph under a reciprocal agreement shall not 4
exceed the amount that would be payable under this section if all the 5
member's service were in the systems administered by the Kentucky 6
Retirement Systems. If the board provides for cross -referencing of 7
insurance premiums, the employer's contribution for the working 8
member or spouse shall be applied toward the premium, and the 9
insurance trust fund established under KRS 61.701 or accounts 10
established pursuant to 26 U.S.C. sec. 401(h) within the funds 11
established in KRS 16.510 and 61.515 shall pay the balance; or 12
4. A combination of the fund sources described by subparagraphs 1. to 3. 13
of this paragraph. 14
Group rates under the ho spital and medical insurance plan shall be made 15
available to the spouse, each dependent child, and each disabled child, 16
regardless of the disabled child's age, of a recipient who is a former member 17
or the beneficiary, if the premium for the hospital and me dical insurance for 18
the spouse, each dependent child, and each disabled child, or beneficiary is 19
paid by payroll deduction from the retirement allowance, electronic funds 20
transfer, or by another method. For purposes of this subsection only, a child 21
shall be considered disabled if he or she has been determined to be eligible for 22
federal Social Security disability benefits or meets the dependent disability 23
standard established by the Department of Employee Insurance in the 24
Personnel Cabinet. 25
(b) For a member who began participating in the system prior to July 1, 2003, the 26
monthly contribution rate shall be paid by the system from the funds specified 27
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under paragraph (a)2. of this subsection and shall be equal to a percentage of 1
the single premium to cover the retired member as follows: 2
1. One hundred percent (100%) of the monthly premium for single 3
coverage shall be paid for a retired member who had two hundred forty 4
(240) months of service or more upon retirement or for a retired member 5
who when he or she was a n employee became disabled as a direct result 6
of an act in line of duty as defined in KRS 16.505 or as a result of a 7
duty-related injury as defined in KRS 61.621; 8
2. Seventy-five percent (75%) of the monthly premium for single coverage 9
shall be paid for a retired member who had less than two hundred forty 10
(240) months of service but at least one hundred eighty (180) months of 11
service upon retirement, provided such retired member agrees to pay the 12
remaining twenty-five percent (25%) by payroll deduction from his or 13
her retirement allowance, electronic funds transfer, or by another 14
method; 15
3. Fifty percent (50%) of the monthly premium for single coverage shall be 16
paid for a retired member who had less than one hundred eighty (180) 17
months of service but had at least one hundred twenty (120) months of 18
service upon retirement, provided such retired member agrees to pay the 19
remaining fifty percent (50%) by payroll deduction fr om his or her 20
retirement allowance, electronic funds transfer, or by another method; or 21
4. Twenty-five percent (25%) of the monthly premium for single coverage 22
shall be paid for a retired member who had less than one hundred twenty 23
(120) months of service but had at least forty -eight (48) months of 24
service upon retirement, provided such retired member agrees to pay the 25
remaining seventy-five percent (75%) by payroll deduction from his or 26
her retirement allowance, electronic funds transfer, or by another 27
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method. 1
(c) Notwithstanding paragraph (b) of this subsection, for a member participating 2
in the system prior to July 1, 2003, who: 3
1. Dies as a direct result of an act in line of duty as defined in KRS 16.505 4
or dies as a result of a duty -related injury as defined in KRS 61.621, the 5
monthly premium shall be paid for his or her spouse so long as the 6
spouse remains eligible for a monthly retirement benefit; 7
2. Becomes totally and permanently disabled as defined in KRS 16.582 as 8
a direct result of an act in line of duty as defined in KRS 16.505 or 9
becomes disabled as a result of a duty -related injury as defined in KRS 10
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 11
monthly premium shall be paid for his or her spouse so long as the 12
member and the spouse individually remain eligible for a monthly 13
retirement benefit; and 14
3. Dies as a direct result of an act in line of duty as defined in KRS 16.505, 15
dies as a result of a duty -related injury as defined in KRS 61.621, 16
becomes totally and permanently disabled as defined in KRS 16.582 as a 17
direct result of an act in line of duty as defined in KRS 16.505, or 18
becomes disabled as a result of a duty -related injury as defined in KRS 19
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the 20
monthly premium shall be paid for each dependent child as defined in 21
KRS 16.505, so long as the member remains eligible for a monthly 22
retirement benefit, unless deceased, and each dependent child 23
individually remains eligible under KRS 16.505. 24
(d) 1. For a member who began participating in the system prior to July 1, 25
2003, who was determined to be in a hazardous position in the Kentucky 26
Employees Retirement System or in a position in the State Police 27
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Retirement System, or who is receiving a retirement al lowance based on 1
General Assembly service, the funds specified under paragraph (a)2. of 2
this subsection shall also pay a percentage of the monthly contribution 3
rate sufficient to fund the premium costs for hospital and medical 4
insurance coverage for the sp ouse and for each dependent child of a 5
recipient. 6
2. The percentage of the monthly contribution rate paid for the spouse and 7
each dependent child of a recipient who was in a hazardous position or 8
who is receiving a retirement allowance based on General Ass embly 9
service in accordance with subparagraph 1. of this paragraph shall be 10
based solely on the member's service in a hazardous position using the 11
formula in paragraph (b) of this subsection. 12
(e) For members who begin participating in the system on or after July 1, 2003: 13
1. Participation in the insurance benefits provided under this section shall 14
not be allowed until the member has earned at least one hundred twenty 15
(120) months of service in the state -administered retirement systems, 16
except that for member s who begin participating in the system on or 17
after September 1, 2008, participation in the insurance benefits provided 18
under this section shall not be allowed until the member has earned at 19
least one hundred eighty (180) months of service credited under K RS 20
16.543(1) or 61.543(1), or another state-administered retirement system. 21
2. A member who meets the minimum service requirements as provided by 22
subparagraph 1. of this paragraph shall upon retirement be eligible for 23
the following monthly contribution rat e to be paid on his or her behalf, 24
or on behalf of the spouse or dependent of a member with service in a 25
hazardous position, from the funds specified under paragraph (a)2. of 26
this subsection: 27
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a. For members with service in a nonhazardous position, a monthl y 1
insurance contribution of ten dollars ($10) for each year of service 2
as a participating employee in a nonhazardous position; 3
b. For members with service in a hazardous position or who 4
participate in the State Police Retirement System, a monthly 5
insurance contribution of fifteen dollars ($15) for each year of 6
service as a participating employee in a hazardous position or the 7
State Police Retirement System; and 8
c. Upon the death of the retired member, the beneficiary, if the 9
beneficiary is the member's spou se, shall be entitled to a monthly 10
insurance contribution of ten dollars ($10) for each year of service 11
the member attained as a participating employee in a hazardous 12
position. 13
3. The minimum service requirement to participate in benefits as provided 14
by subparagraph 1. of this paragraph shall be waived for a member who 15
receives a satisfactory determination of a hazardous disability that is a 16
direct result of an act in line of duty as defined in KRS 16.505, and the 17
member shall be entitled to the benefits pa yable under this subsection as 18
though the member had twenty (20) years of service in a hazardous 19
position. 20
4. The minimum service required to participate in benefits as provided by 21
subparagraph 1. of this paragraph shall be waived for a member who is 22
disabled as a result of a duty -related injury as defined in KRS 61.621 23
and is eligible for the benefits provided by KRS 61.621(5)(b), and the 24
member shall be entitled to the benefits payable under this subsection as 25
though the member had twenty (20) years of se rvice in a nonhazardous 26
position. 27
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5. Notwithstanding the provisions of this paragraph, the minimum service 1
requirement to participate in benefits as provided by subparagraph 1. of 2
this paragraph shall be waived for a for a member who dies as a direct 3
result of an act in line of duty as defined in KRS 16.505, who becomes 4
totally and permanently disabled as defined in KRS 16.582 as a direct 5
result of an act in line of duty as defined in KRS 16.505, who dies as a 6
result of a duty -related injury as defined in K RS 61.621, or who 7
becomes disabled as a result of a duty -related injury as defined in KRS 8
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), 9
and the premium for the member, the member's spouse, and for each 10
dependent child as defined in KRS 16.505 shall be paid in full by the 11
systems so long as the member, member's spouse, or dependent child 12
individually remains eligible for a monthly retirement 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 for 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 addi tional 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 prov ided 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 system to retirees who are not eligible for 5
Medicare or for reimburs ements 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 funding 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 of 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, 2008, 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 cov erage 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 s ervice 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 requireme nts 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, includin g 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 i n 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 cost 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 total 24
combined service and in conjunction with the reciprocal agre ement 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 Systems 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 benefits 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 cover age 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 subsection (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 pr ovide 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 premium 24
subsidies under subsection (4)(e)5. of this section. The reim bursement 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 insurance premiums for an 5
amount not to exceed the total monthly co ntribution 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 recipients are eligible for the same 9
coverage as recipients living in Kentucky. 10
Section 4. 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" may 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 aft er 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 benefits 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 contrac t 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, or 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 hosp ital 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 eligible for Medicar e 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 recipients 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 depend ent 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 depen dents 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 coverage 22
but is subject to the Medicare Secondary Payer Ac t 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 from 26
offering or which does not offer a hospital and medic al benefit to 27
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the recipient as a condition of reemployment under KRS 70.293, 1
95.022, Section 1 of this Act, or 164.952. Individuals who are 2
eligible, pursuant to this subdivision, to be included in the 3
Kentucky Employees Health Plan as provided by KRS 18A. 225 to 4
18A.2287 may be rated as a separate class from other eligible 5
employees and retirees for the purpose of determining medical 6
insurance premiums. 7
(c) For recipients of a retirement allowance who are not eligible for the same 8
level of hospital and medi cal benefits as recipients living in Kentucky having 9
the same Medicare hospital and medical insurance eligibility status, the board 10
shall provide a medical insurance reimbursement plan as described in 11
subsection (6) of this section. 12
(d) Notwithstanding any thing in KRS Chapter 78 to the contrary, the board of 13
trustees, in its discretion, may take necessary steps to ensure compliance with 14
42 U.S.C. sec. 300bb-1 et seq. 15
(3) (a) Each employer participating in the County Employees Retirement System as 16
provided in KRS 78.510 to 78.852 shall contribute to the insurance trust fund 17
established by KRS 61.701 the amount necessary to provide the monthly 18
contribution rate as provided for under this section. Such employer 19
contribution rate shall be developed by appropriat e actuarial method as a part 20
of the determination of each respective employer contribution rate determined 21
under KRS 78.635. 22
(b) 1. Each employer described in paragraph (a) of this subsection shall deduct 23
from the creditable compensation of each member who se membership 24
date begins on or after July 1, 2003, and who is subject to the benefits 25
provided under subsection (4)(e) of this section, an amount equal to one 26
percent (1%) of the member's creditable compensation if the member is 27
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participating in a nonhaza rdous position and two percent (2%) of the 1
member's creditable compensation if the member is participating in a 2
hazardous position. The deducted amounts shall, at the discretion of the 3
board, be credited to accounts established pursuant to 26 U.S.C. sec. 4
401(h), within the funds established in KRS 78.520, or the insurance 5
trust fund established under KRS 61.701. Notwithstanding the 6
provisions of this paragraph, a transfer of assets between the accounts 7
established pursuant to 26 U.S.C. sec. 401(h), within t he funds 8
established in KRS 78.520, and the insurance trust fund established 9
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 KR S 12
78.625. 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 78.520, or the insurance 15
trust fund established under KRS 61.701. Notw ithstanding any 16
minimum compensation requirements provided by law, the deductions 17
provided by this paragraph shall be made, and the compensation of the 18
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 in accordance with[pursuant to] KRS Chapter 13A. 22
4. Every member shall be deemed to consent and agree to the deductions 23
made pursuant to this paragraph, an d 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 by the payment, except as to any benefits provided by KRS 27
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78.510 to 78.852. No me mber may elect whether to participate in, or 1
choose the contribution amount to accounts established pursuant to 26 2
U.S.C. sec. 401(h) within the funds established in KRS 78.520, or the 3
insurance trust fund established under KRS 61.701. The member shall 4
have no option to receive the contribution required by this paragraph 5
directly instead of having the contribution paid to accounts established 6
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 7
78.520, or the insurance trust fund establishe d under KRS 61.701. No 8
member may receive a rebate or refund of contributions. If a member 9
establishes a membership date prior to July 1, 2003, pursuant to KRS 10
61.552(2) or (3) or who is subject to the benefits provided under 11
subsection (4)(b) or (d) of th is section, then this paragraph shall not 12
apply to the member and all contributions previously deducted in 13
accordance with this paragraph shall be refunded to the member without 14
interest. The contribution made pursuant to this paragraph shall not act 15
as a reduction or offset to any other contribution required of a member 16
or recipient under KRS 78.510 to 78.852. 17
5. The board of trustees, at its discretion, may direct that the contributions 18
required by this paragraph be accounted for within accounts establish ed 19
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS 20
78.520, or the insurance trust fund established under KRS 61.701, 21
through the use of separate accounts. 22
(4) (a) The premium required to provide hospital and medical insurance plan 23
coverage under this section shall be paid wholly or partly from funds 24
contributed by: 25
1. The recipient of a retirement allowance, by payroll deduction from his 26
or her retirement allowance, electronic funds transfer, or by other 27
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method; 1
2. The insurance trust fund established by KRS 61.701 or accounts 2
established pursuant to 26 U.S.C. sec. 401(h) within the funds 3
established in KRS 78.520; 4
3. Another state -administered retirement system, including the systems 5
administered by Kentucky Retirement Systems, under a reciprocal 6
arrangement, except that any portion of the premium paid from the 7
funds specified by subparagraph 2. of this paragraph under a reciprocal 8
agreement shall not exceed the amount that would be payable under this 9
section if all the member's service were in the County Employees 10
Retirement System. 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 toward the premium, and the 13
insurance trust fund established u nder KRS 61.701 or accounts 14
established pursuant to 26 U.S.C. sec. 401(h) within the funds 15
established in KRS 78.520, shall pay the balance; or 16
4. A combination of the fund sources described by subparagraphs 1. to 3. 17
of this paragraph. 18
Group rates under t he 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 a nd 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, or 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 Department 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 subsection 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 was disabled as a direct result of 10
an act in line of duty as defined in KRS 78.510(48) 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 agrees to pay the 16
remaining twenty-five percent (25%) by payroll deductio n 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 member who had less than one hundred eighty (180) 21
months of service but h ad 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 78.510 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 78.5524 as 12
a direct result of an act in line of duty as defined in KRS 78.510 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 individually 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 78.510, 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 78.5524 as 21
a direct result of an act in line of duty as de fined in KRS 78.510, 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 78.510, so lo ng 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 78.510. 1
(d) 1. For a member who began participating in the system prior to July 1, 2
2003, who was determine d to be in a hazardous position in the County 3
Employees Retirement System, or who is receiving a retirement 4
allowance based on General Assembly service, the funds specified under 5
paragraph (a)2. of this subsection shall also pay a percentage of the 6
monthly contribution rate sufficient to fund the premium costs for 7
hospital and medical insurance coverage for the spouse and for each 8
dependent child of a recipient. 9
2. The percentage of the monthly contribution rate paid for the spouse and 10
each dependent child of a recipient who was in a hazardous position or 11
who is receiving a retirement allowance based on General Assembly 12
service in accordance with subparagraph 1. of this paragraph shall be 13
based solely on the member's service in a hazardous position using the 14
formula in paragraph (b) of this subsection, except that for any recipient 15
of a retirement allowance from the County Employees Retirement 16
System who was contributing to the system on January 1, 1998, for 17
service in a hazardous position, the percentage of the monthly 18
contribution shall be based on the total of hazardous service and any 19
nonhazardous service as a police or firefighter with the same agency, if 20
that agency was participating in the County Employees Retirement 21
System but did not offer hazardous d uty coverage for its police and 22
firefighters at the time of initial participation. 23
(e) For members who begin participating in the system on or after July 1, 2003: 24
1. Participation in the insurance benefits provided under this section shall 25
not be allowed until the member has earned at least one hundred twenty 26
(120) months of service in the state -administered retirement systems, 27
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except that for members who begin participating in the system on or 1
after September 1, 2008, participation in the insurance benefit s provided 2
under this section shall not be allowed until the member has earned at 3
least one hundred eighty (180) months of service credited under KRS 4
78.615(1) or another state-administered retirement system; 5
2. A member who meets the minimum service requirements as provided by 6
subparagraph 1. of this paragraph shall upon retirement be eligible for 7
the following monthly contribution rate to be paid on his or her behalf, 8
or on behalf of the spouse or dependent of a member with service in a 9
hazardous position , from the funds specified under paragraph (a)2. of 10
this subsection: 11
a. For members with service in a nonhazardous position who do not 12
meet the career threshold, a monthly insurance contribution of ten 13
dollars ($10) for each year of service as a participat ing employee 14
in a nonhazardous position; 15
b. For members with service in a nonhazardous position who meet 16
the career threshold, a monthly insurance contribution towards the 17
health plans offered to retirees who are not eligible for Medicare 18
of forty dollars ($40) for each year of service as a participating 19
employee in a nonhazardous position and a monthly insurance 20
contribution towards the health plans offered to retirees who are 21
eligible for Medicare of ten dollars ($10) for each year of service 22
as a partici pating employee in a nonhazardous position. The 23
monthly insurance contribution payable to retirees eligible for 24
Medicare under this subdivision shall be adjusted as necessary so 25
that it is equivalent to the monthly contribution amount computed 26
under subdiv ision a. of this subparagraph as adjusted by 27
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subparagraph 6.a. of this paragraph; 1
c. For members with service in a hazardous position who do not meet 2
the career threshold, a monthly insurance contribution of fifteen 3
dollars ($15) for each year of service a s a participating employee 4
in a hazardous position; 5
d. For members with service in a hazardous position who meet the 6
career threshold, a monthly insurance contribution towards the 7
health plans offered to retirees who are not eligible for Medicare 8
of fifty dollars ($50) for each year of service as a participating 9
employee in a hazardous position and a monthly insurance 10
contribution towards the health plans offered to retirees who are 11
eligible for Medicare of fifteen dollars ($15) for each year of 12
service as a participating employee in a hazardous position. The 13
monthly insurance contribution payable to retirees eligible for 14
Medicare under this subdivision shall be adjusted as necessary so 15
that it is equivalent to the monthly contribution amount computed 16
under subdivision c. of this subparagraph as adjusted by 17
subparagraph 6.a. of this paragraph; and 18
e. Upon the death of the retired member, the beneficiary, if the 19
beneficiary is the member's spouse, shall be entitled to a monthly 20
insurance contribution of ten do llars ($10) for each year of service 21
the member attained as a participating employee in a hazardous 22
position; 23
3. The minimum service requirement to participate in benefits as provided 24
by subparagraph 1. of this paragraph shall be waived for a member who 25
receives a satisfactory determination of a hazardous disability that is a 26
direct result of an act in line of duty as defined in KRS 78.510(48) and 27
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the member shall be entitled to the benefits payable under this 1
subsection as though the member had twenty (20) years of service in a 2
hazardous position; 3
4. The minimum service required to participate in benefits as provided by 4
subparagraph 1. of this paragraph shall be waived for a member who is 5
disabled as a result of a duty -related injury as defined in KRS 61.62 1 6
and is eligible for the benefits provided by KRS 61.621(5)(b), and the 7
member shall be entitled to the benefits payable under this subsection as 8
though the member had twenty (20) years of service in a nonhazardous 9
position; 10
5. Notwithstanding the provisi ons of this paragraph, the minimum service 11
requirement to participate in benefits as provided by subparagraph 1. of 12
this paragraph shall be waived for a member who dies as a direct result 13
of an act in line of duty as defined in KRS 78.510(48), who becomes 14
totally and permanently disabled as defined in KRS 78.5524 as a direct 15
result of an act in line of duty as defined in KRS 78.510, who dies as a 16
result of a duty -related injury as defined in KRS 61.621, or who 17
becomes disabled as a result of a duty -related injury as defined in KRS 18
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), 19
and the premium for the member, the member's spouse, and for each 20
dependent child as defined in KRS 78.510 shall be paid in full by the 21
systems so long as the me mber, member's spouse, or dependent child 22
individually remains eligible for a monthly retirement benefit; 23
6. Except as provided by subparagraph 5. of this paragraph, the monthly 24
insurance contribution amount shall be increased: 25
a. On July 1 of each year by one and one -half percent (1.5%). The 26
increase shall be cumulative and shall continue to accrue after the 27
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member's retirement for as long as a monthly insurance 1
contribution is payable to the retired member or beneficiary but 2
shall not apply to any increas e in the contribution attributable to 3
the increase specified by subdivision b. of this subparagraph; and 4
b. On January 1 of each year by five dollars ($5) for members who 5
have accrued an additional full year of service as a participating 6
employee beyond th e career threshold, subject to the following 7
restrictions: 8
i. The additional insurance contribution provided by this 9
subdivision shall only be applied to the monthly contribution 10
amounts provided under subparagraph 2.b. and d. of this 11
paragraph; 12
ii. The ad ditional insurance contribution provided by this 13
subdivision shall only be payable towards the health plans 14
offered by the system to retirees who are not eligible for 15
Medicare or for reimbursements provided to retirees not 16
eligible for Medicare pursuant to subsection (6)(a)2. of this 17
section; and 18
iii. In order for the annual increase to occur as provided by this 19
subdivision, the funding level of retiree health benefits for 20
the system in which the employee is receiving the additional 21
insurance contribution s hall be at least ninety percent (90%) 22
as of the most recent actuarial valuation and be projected by 23
the actuary to remain ninety percent (90%) for the year in 24
which the increase is provided; 25
7. The benefits of this paragraph provided to a member whose participation 26
begins on or after July 1, 2003, shall not be considered as benefits 27
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protected by the inviolable contract provisions of KRS 78.852. The 1
General Assembly reserves the right to suspend or reduce the benefits 2
conferred in this paragraph if in its ju dgment the welfare of the 3
Commonwealth so demands; 4
8. An employee whose membership date is on or after September 1, 2008, 5
who retires and is reemployed in a regular full -time position required to 6
participate in the system or the Kentucky Retirement Systems shall not 7
be eligible for health insurance coverage or benefits provided by this 8
section and shall take coverage with his or her empl oying agency during 9
the period of reemployment in a regular full-time position; and 10
9. As used in[For purposes of] this paragraph: 11
a. "Career threshold" for a member with service in a nonhazardous 12
position means twenty -seven (27) years of service credited under 13
KRS 16.543(1), 61.543(1), 78.615(1), or another state -14
administered retirement system and for a member with service in a 15
hazardous position means the service requirements specified by 16
KRS 78.5514(2)(a)2. or (3)(b), or 78.5516(6)(b), as applicable; 17
and 18
b. "Funding level" means the actuarial value of assets divided by the 19
actuarially accrued liability expressed as a percentage that is 20
determined and reported by the system's actuary in the annual 21
actuarial valuation. 22
(f) For members with service in anothe r state -administered retirement system 23
who select hospital and medical insurance plan coverage through the system: 24
1. The system shall compute the member's combined service, including 25
service credit in another state -administered retirement system, and 26
calculate the portion of the member's premium monthly contribution rate 27
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to be paid by the funds specified under paragraph (a)2. of this subsection 1
according to the criteria established in paragraphs (a) to (e) of this 2
subsection. Each state -administered retire ment system shall pay 3
annually to the insurance trust fund established under KRS 61.701 the 4
portion of the system's cost of the retiree's monthly contribution for 5
single coverage for hospital and medical insurance plan which shall be 6
equal to the percentage of the member's number of months of service in 7
the other state -administered retirement plan divided by his or her total 8
combined service and in conjunction with the reciprocal agreement 9
established between the system and the other state -administered 10
retirement systems. The amounts paid by the other state -administered 11
retirement plans and by the County Employees Retirement System from 12
funds specified under paragraph (a)2. of this subsection shall not be 13
more than one hundred percent (100%) of the monthly c ontribution 14
adopted by the respective boards of trustees; 15
2. A member may not elect coverage for hospital and medical benefits 16
through more than one (1) of the state -administered retirement systems; 17
and 18
3. A state -administered retirement system shall not p ay any portion of a 19
member's monthly contribution for medical insurance unless the 20
member is a recipient or annuitant of the plan. 21
(5) Premiums paid for hospital and medical insurance coverage procured under 22
authority of this section shall be exempt from a ny premium tax which might 23
otherwise be required under KRS Chapter 136. The payment of premiums by the 24
funds described by subsection (4)(a)2. of this section shall not constitute taxable 25
income to an insured recipient. No commission shall be paid for hospi tal and 26
medical insurance procured under authority of this section. 27
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(6) (a) The board shall promulgate an administrative regulation to establish a medical 1
insurance reimbursement plan to provide reimbursement for hospital and 2
medical insurance plan premiums of recipients of a retirement allowance who: 3
1. Are not eligible for the same level of hospital and medical benefits as 4
recipients living in Kentucky and having the same Medicare hospital 5
and medical insurance eligibility status; or 6
2. Are eligible for r etiree health subsidies as provided by subsection (4)(e) 7
of this section, except for those recipients eligible for full premium 8
subsidies under subsection (4)(e)5. of this section. The reimbursement 9
program as provided by this subparagraph shall be availab le to the 10
recipient regardless of the hospital and medical insurance plans offered 11
by the systems. 12
(b) An eligible recipient shall file proof of payment for hospital and medical 13
insurance plan coverage with the retirement office. Reimbursement to eligible 14
recipients shall be made on a quarterly basis. The recipient shall be eligible 15
for reimbursement of substantiated medical insurance premiums paid by the 16
recipient to obtain coverage for an amount not to exceed the total monthly 17
contribution rate determined under subsection (4) of this section. For 18
reimbursements provided under paragraph (a)2. of this subsection, the full 19
subsidy under subsection (4)(e)2. of this section shall be reimbursed by the 20
system to the recipient up to the amount individually paid by the recipient to 21
obtain coverage. In the case of recipients of a retirement allowance from a 22
nonhazardous position, the reimbursement shall be limited to the amount paid 23
by the recipient to obtain single coverage. 24
(c) For purposes of recipients described by paragraph (a)1. of this subsection, the 25
plan shall not be made available if all recipients are eligible for the same 26
coverage as recipients living in Kentucky. 27
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Section 5. KRS 78.5540 is amended to read as follows: 1
(1) A retired member whose disability retirement was discontinued pursuant to KRS 2
78.5528 and who is reemployed by an employer participating in the system or the 3
Kentucky Retirement Systems prior to his or her normal retirement date shall have 4
his or her accounts combined upon termination for determining eligibility for 5
benefits. If the member is eligible for retirement, the member's service and 6
creditable compensation earned as a result of his or her reemploym ent shall be used 7
in the calculation of benefits, except that the member's final compensation shall not 8
be less than the final compensation last used in determining his or her retirement 9
allowance. The member shall not change beneficiary or payment option 10
designations. 11
(2) (a) If a retired member accepts employment or begins serving as a volunteer with 12
an employer participating in the systems administered by Kentucky 13
Retirement Systems or the County Employees Retirement System within 14
twelve (12) months of h is or her retirement date, the retired member shall 15
notify the Authority and the participating employer shall submit the 16
information required or requested by the Authority to confirm the individual's 17
employment or volunteer status. The retired member shall not be required to 18
notify the Authority regarding any employment or volunteer service with a 19
participating agency that is accepted after twelve (12) months following his or 20
her retirement date. 21
(b) If the retired member is under a contract to provide services as an independent 22
contractor or leased employee to an employer participating in the systems 23
administered by Kentucky Retirement Systems or the County Employees 24
Retirement System within twelve (12) months of his or her retirement date, 25
the member shall submit a copy of that contract to the Authority, and the 26
Authority shall determine if the member is an independent contractor or 27
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leased employee for purposes of retirement benefits. The retired member and 1
the participating employer shall submit the inform ation required or requested 2
by the Authority to confirm the individual's status as an independent 3
contractor or leased employee. The retired member shall not be required to 4
notify the Authority regarding any services entered into as an independent 5
contractor or leased employee with a participating agency that the employee 6
enters into after twelve (12) months following his or her retirement date. 7
(3) Retired members of the County Employees Retirement System who returned to 8
work with an employer that particip ates in the County Employees Retirement 9
System or Kentucky Retirement Systems prior to September 1, 2008, shall be 10
governed by the provisions of KRS 61.637(1) to (16). 11
(4) The following shall apply to retired members of the County Employees Retirement 12
System who are reemployed on or after September 1, 2008, by an agency 13
participating in the systems administered by the County Employees Retirement 14
System or the Kentucky Retirement Systems: 15
(a) If a retired member is receiving a retirement allowance from the C ounty 16
Employees Retirement System, or has filed the forms required to receive a 17
retirement allowance from the County Employees Retirement System, and is 18
employed in a regular full -time position required to participate in the County 19
Employees Retirement Sys tem or one (1) of the systems administered by the 20
Kentucky Retirement Systems or is employed in a position that is not 21
considered regular full -time with an employer participating in the County 22
Employees Retirement System or in one (1) of the systems admini stered by 23
the Kentucky Retirement Systems within one (1) month following the 24
member's initial retirement date, the member's retirement shall be voided, and 25
the member shall repay to the system all benefits received, including any 26
health insurance benefits. If the retired member is returning to work in a 27
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regular full -time position required to participate in the County Employees 1
Retirement System: 2
1. The member shall contribute to a member account established for him or 3
her in the County Employees Retirement System or in one (1) of the 4
systems administered by the Kentucky Retirement Systems, and 5
employer contributions shall be paid on behalf of the member by the 6
participating employer to the system; and 7
2. Upon subsequent retirement, the member shall be eligib le for a 8
retirement allowance based upon total service and creditable 9
compensation, including any additional service or creditable 10
compensation earned after his or her initial retirement was voided; 11
(b) If a retired member is receiving a retirement allowan ce from the County 12
Employees Retirement System and is employed in a regular full -time position 13
required to participate in the County Employees Retirement System or in one 14
(1) of the systems administered by the Kentucky Retirement Systems after a 15
one (1) mo nth period following the member's initial retirement date, the 16
member may continue to receive his or her retirement allowance during the 17
period of reemployment subject to the following provisions: 18
1. If a member is reemployed by a participating employer wi thin twelve 19
(12) months of the member's retirement date, the participating employer 20
shall certify in writing on a form prescribed by the Authority that no 21
prearranged agreement existed between the employee and employer 22
prior to the employee's retirement fo r the employee to return to work 23
with the participating employer. If the participating employer fails to 24
complete the certification or the Authority determines a prearranged 25
agreement exists, the member's retirement shall be voided and the 26
provisions of paragraph (a) of this subsection shall apply to the member 27
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and the employer. For purposes of this paragraph: 1
a. If an elected official is reelected to a new term of office in the 2
same position as the elected official held prior to retirement and 3
takes office within twelve (12) months of his or her retirement 4
date, he or she shall be deemed by the Authority as having a 5
prearranged agreement; and 6
b. Employment that is accepted by the retired member after twelve 7
(12) months following the member's retirement date shall not 8
constitute a prearranged agreement under this paragraph; 9
2. Notwithstanding any other provision of KRS Chapter 78 to the contrary, 10
the member shall not contribute to the system and shall not earn any 11
additional benefits for any work performed during the period of 12
reemployment; 13
3. Except as provided by KRS 70.291 to 70.293, 95.022, Section 1 of this 14
Act, and 164.952 and except for any retiree employed as a school 15
resource officer as defined by KRS 158.441 or as a Kentucky guardian 16
as defined by KRS 158.4431, the employer shall pay employer 17
contributions as specified by KRS 78.5536 and 78.635 on all credit able 18
compensation earned by the employee during the period of 19
reemployment. The additional contributions paid shall be used to reduce 20
the unfunded actuarial liability of the system; and 21
4. Except as provided by KRS 70.291 to 70.293, 95.022, Section 1 of th is 22
Act, and 164.952 and except for any retiree employed as a school 23
resource officer as defined by KRS 158.441 or as a Kentucky guardian 24
as defined by KRS 158.4431, the employer shall be required to 25
reimburse the system for the cost of the health insurance premium paid 26
by the system to provide coverage for the retiree, not to exceed the cost 27
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of the single premium. Effective July 1, 2015, local school boards shall 1
not be required to pay the reimbursement required by this subparagraph 2
for retirees employed by the board for eighty (80) days or less during the 3
fiscal year. Effective August 1, 2024, the Department of Education shall 4
pay for the health reimbursements required by this subparagraph for a 5
retiree who participated in a hazardous position prior to July 1, 2003, in 6
the County Employees Retirement System or in one (1) of the systems 7
administered by the Kentucky Retirement Systems, and who is 8
reemployed by a local school board; 9
(c) Notwithstanding paragraphs (a) and (b) of this subsection, a retired member 10
who qualifies as a volunteer for an employer participating in the County 11
Employees Retirement System or the Kentucky Retirement Systems and who 12
is receiving reimbursement of actual expenses, a nominal fee for his or her 13
volunteer services, or both, shall not be considered an employee of the 14
participating employer and shall not be subject to paragraphs (a) and (b) of 15
this subsection if: 16
1. Prior to the retired member's most recent retirement date, he or she did 17
not receive creditable compensation from the p articipating employer in 18
which the retired member is performing volunteer services; 19
2. Any reimbursement or nominal fee received prior to the retired 20
member's most recent retirement date has not been credited as creditable 21
compensation to the member's acco unt or utilized in the calculation of 22
the retired member's benefits; 23
3. The retired member has not purchased or received service credit under 24
any of the provisions of KRS 78.510 to 78.852 for service with the 25
participating employer for which the retired me mber is performing 26
volunteer services; and 27
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4. Other than the status of volunteer, the retired member does not become 1
an employee, leased employee, or independent contractor of the 2
employer for which he or she is performing volunteer services for a 3
period o f at least twelve (12) months following the retired member's 4
most recent retirement date. 5
If a retired member, who provided volunteer services with a participating 6
employer under this paragraph violates any provision of this paragraph, then 7
he or she shall be deemed an employee of the participating employer as of the 8
date he or she began providing volunteer services and both the retired member 9
and the participating employer shall be subject to paragraphs (a) and (b) of 10
this subsection for the period of volunteer service; 11
(d) Notwithstanding any provision of this section, any mayor or member of a city 12
legislative body shall not be required to resign from his or her position as 13
mayor or as a member of the city legislative body in order to begin drawing 14
benefits from the systems administered by the Kentucky Retirement Systems 15
or the County Employees Retirement System or subject to any provision of 16
this section as it relates solely to his or her service as a mayor or member of 17
the city legislative body, if the mayor or member of a city legislative body: 18
1. Has not participated in the County Employees Retirement System prior 19
to retirement, but is otherwise eligible to retire from the Kentucky 20
Employees Retirement System or the State Police Retirement System; or 21
2. Has been or is participating in the County Employees Retirement 22
System and is at least sixty-two (62) years of age. If a mayor or member 23
of a city legislative body who is at least sixty -two (62) years of age 24
retires from the systems administered by Kentuc ky Retirement Systems 25
or the County Employees Retirement System but remains in office after 26
his or her effective retirement date, the mayor or member of the city 27
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legislative body shall not accrue any further service credit or benefits in 1
the systems admini stered by Kentucky Retirement Systems or the 2
County Employees Retirement System for any employment occurring 3
on or after the effective retirement date; 4
(e) Notwithstanding any provision of this section, any current or future part -time 5
adjunct instructor for the Kentucky Fire Commission who has not participated 6
in the Kentucky Employees Retirement System prior to retirement, but who is 7
otherwise eligible to retire from the County Employees Retirement System, 8
shall not be: 9
1. Required to resign from his or he r position as a part -time adjunct 10
instructor for the Kentucky Fire Commission in order to begin drawing 11
benefits from the County Employees Retirement System; or 12
2. Subject to any provision of this section as it relates solely to his or her 13
service as a par t-time adjunct instructor for the Kentucky Fire 14
Commission; 15
(f) If a member is receiving a retirement allowance from the County Employees 16
Retirement System and enters into a contract or becomes a leased employee of 17
an employer under contract with an employ er participating in the County 18
Employees Retirement System or one (1) of the systems administered by the 19
Kentucky Retirement Systems: 20
1. At any time following retirement, if the Authority determines the 21
employment arrangement does qualify as an independent contractor or 22
leased employee, the member may continue to receive his or her 23
retirement allowance during the period of the contract; 24
2. Within one (1) month following the member's initial retirement date, if 25
the Authority determines the employment arrange ment does not qualify 26
as an independent contractor or leased employee, the member's 27
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retirement shall be voided in accordance with paragraph (a) of this 1
subsection; 2
3. After one (1) month but within twelve (12) months following the 3
member's initial retirement, if the Authority determines the employment 4
arrangement does not qualify as an independent contractor or leased 5
employee and that a prearranged agreement existed between the member 6
and the agency for the member to return to work with the agency, the 7
member's retirement shall be voided in accordance with paragraph (a) of 8
this subsection; 9
4. After a twelve (12) month period following the member's initial 10
retirement, the member may continue to receive his or her retirement 11
allowance during the period of the contract and the member shall not be 12
required to notify the Authority or submit any documentation for 13
purposes of this section to the Authority; and 14
5. After twelve (12) months or more following the retired member's 15
retirement date, the initiation of a c ontract or the initial date of the 16
leased employment of a retired member by a participating agency shall 17
not constitute a prearranged agreement under this subsection; 18
(g) The Authority shall issue a final determination regarding a certification of the 19
absence of a prearranged agreement or the retired member's qualification as 20
an independent contractor or leased employee as required under this section 21
no later than thirty (30) days after the retired member and participating 22
employer provide all required form s and additional information required by 23
the Authority; and 24
(h) Retired members of one (1) of the systems administered by Kentucky 25
Retirement Systems who are reemployed by an employer in the County 26
Employees Retirement System on or after September 1, 2008, shall not be 27
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eligible to earn a second retirement account in the County Employees 1
Retirement System for his or her service to the employer. 2
(5) The Authority shall promulgate administrative regulations to implement the 3
requirements of this section, includ ing incorporating by reference Authority -4
prescribed forms that a retired member and participating agency shall provide the 5
systems under subsections (1) and (4) of this section. 6
(6) (a) As used in this section, "reemployment" or "reinstatement" [ as used in this 7
section] shall not include a retired member who has been ordered reinstated 8
by the Personnel Board under authority of KRS 18A.095. 9
(b) 1. A retired member who has been ordered reinstated without loss of p ay 10
by the Personnel Board under authority of KRS 18A.095 or by court 11
order or by order of the Kentucky Commission on Human Rights and 12
accepts employment by an agency participating in the Kentucky 13
Employees Retirement System, State Police Retirement System, or 14
County Employees Retirement System shall void his or her retirement 15
by reimbursing the system in the full amount of his or her retirement 16
allowance payments received, including any health insurance benefits 17
paid to or on behalf of the member. 18
2. Within twelve (12) months of the date of the final order of the Personnel 19
Board, the Kentucky Commission on Human Rights, or the court, the 20
member shall repay the system the full amount of his or her retirement 21
allowance payments and health insurance benefits by lump sum or enter 22
into an agreement with the Authority for repayment by installments. 23
3. Once the system has been fully reimbursed for the benefits paid to the 24
member and on the member's behalf, additional contributions and 25
service credit based on the rei nstated employment shall be added to the 26
member's account. 27