ARIZONA STATE SENATE
Phoenix, Arizona
Increases the health care premium subsidy for members of the Arizona State Retirement System (ASRS), Public Safety Personnel Retirement System (PSPRS), Corrections Officer Retirement Plan (CORP) and Elected Officials’ Retirement Plan (EORP) in areas where no managed care program is available.
Currently, the Legislature requires ASRS, PSPRS, CORP and EORP to pay a portion of a retired member’s health care premium. The subsidy amount differs between the four plans and whether the member, survivor or dependents are eligible for Medicare. The portion of the member’s health care premium that is not covered by the various plans is paid from the member’s retirement benefit or out of the member’s pocket. Recently, insurance providers in rural areas of Arizona have stopped offering healthcare management organization (HMO) coverage to plan members. Many providers offer a more costly preferred provider organization (PPO) as the only managed care program. This bill would increase the amount that fund administrators pay to subsidize the premium of those members who live in rural areas where no managed care program is available.
A fiscal note has been requested for this bill.
Provisions
1. Requires ASRS, PSPRS, EORP and CORP fund managers to pay, from fund assets, through December 31, 2006, an insurance premium benefit to each retired or disabled member who elects to participate in the coverage provided by the respective fund or any other health and accident insurance coverage provided by an employer, if that person resides in a nonservice area. Specifically, the insurance premium benefit is as follows:
·
Up
to $300 per month if the retired or disabled person is not eligible for
Medicare and has ten or more years of credited service.
·
Up
to $170 if the retired or disabled member is eligible for Medicare and has ten
or more years of credited service.
2. Requires the ASRS, PSPRS, EORP and CORP fund managers to pay, from fund assets, through December 31, 2006, part of the family coverage premium of a member who elects family coverage provided by the fund or any other health and accident insurance coverage provided by an employer. Specifically, the insurance premium benefits are as follows:
·
Up
to $600 per month if the retired or disabled member of one of the four
specified retirement systems and one or more dependants are not eligible for
Medicare.
·
Up
to $300 per month if the member is not eligible for Medicare, but one or more
dependents are eligible for Medicare, or if the member is eligible for Medicare
and one or more dependents are not eligible for Medicare.
3. Stipulates that a member who resides in a nonservice area and is enrolled in a managed care program is not eligible for the insurance premium benefit if the member terminates coverage under his or her current managed care program.
4. Allows a member to elect to receive a temporary increase in the member’s retirement benefit through December 31, 2006, instead of the health insurance benefit subsidy, equal to the amount of the subsidy stipulated.
5. Requires that a member choosing the increased retirement benefit option must use the amount of the benefit increase to pay health insurance premium costs.
6. Defines “nonservice area” as an area in Arizona in which ASRS, the Department of Administration or a participating employer does not provide or administer a managed care program for which the member is eligible.
7. Applies subsidy increases to survivors.
8. Makes technical and conforming changes.
9. Provides for a delayed effective date of January 1, 2002.
Prepared by Senate Staff
February 7, 2001