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 June 30, 2004, 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 June 30, 2004, 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 $350 per month if the retired or disabled member and one or more dependents
are 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 purchase individual health care coverage and receive payment through June 30, 2004 equal to the amount of the subsidy stipulated through the retired member's employee if that employee assumes the administrative functions associated with the payment.
5. Requires a participating employer that agrees to administer the payment in lieu of the increased healthcare benefit subsidy to verify that the payment is used to pay for health insurance coverage if the payment is made to the retired member or survivor.
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 health care services organization (HMO) program excluding any preferred provider organization (PPO) program or individual indemnity program for which the member is eligible.
7. Applies subsidy increases to survivors.
8. Makes technical and conforming changes.
9. Provides for a retroactive delayed effective date of July 1, 2001.
Amendments Adopted by Committee
1. Changes the definition of a "nonservice area" from an area in Arizona where no managed care program is provided to an area in Arizona where no healthcare services organization (HMO) program is offered excluding any preferred provider organization (PPO) or individual health indemnity policy is offered.
2. Shortens the period during which the increased subsidy will be offered from five years to three years.
3. Eliminates the provision of the bill that allows individuals to receive the subsidy as a temporary increase to their retirement benefits and instead allows a retired member or survivor to purchase individual health care coverage and receive a payment equal to the subsidy through the retired member's employer if that employer assumes the administrative functions associated with the payment and verifies that the payment is being used to purchase health insurance coverage.
Senate Action
FIN 2/12/01 DPA 6-2-0-0
Prepared by Senate Staff
February 15, 2001