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 all geographic areas. Provides for an additional temporary increase in areas where no managed care program is available.
Background
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. These numbers have never been adjusted for ASRS, CORP or EORP since the inception of these respective subsidy amounts in 1988 and 1990. PSPRS amounts were last adjusted in 1994. 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 health maintenance organization (HMO) coverage to plan members. Many providers offer a more costly preferred provider organization (PPO) as the only managed care program.
This bill increases 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 through December 31, 2003, and increase the health care premium subsidy and make it equal for all retired members of all four plans regardless of where a member resides.
A Joint Legislative Budget Committee (JLBC) fiscal note estimates a total fiscal impact of $10.6 million in FY 2003-2004, including $8.4 million from the state general fund and $2.2 million from other appropriated funds.
1. Raises the monthly health care premium subsidy for members of ASRS, PSPRS, CORP and EORP choosing single coverage regardless of location as follows:
·
Up
to $150.00 for a retired or disabled member of ASRS who is not eligible for
Medicare
·
Up to $100 for a retired or disabled member who
is eligible for Medicare
2. Raises the monthly health care premium subsidy for members of ASRS, PSPRS, CORP and EORP choosing family coverage regardless of location as follows:
·
From
$175 to $260 if the retired or disabled member of ASRS and one or more
dependents are not eligible for Medicare.
·
Up
to $260 if the retired or disabled member and one or more dependents are not
eligible for Medicare.
·
Up
to $170 if the retired or disabled member of ASRS and one ore more dependents
are eligible for Medicare.
·
Up
to $215 if the retired or disabled member of ASRS is not eligible for Medicare
and 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. Requires ASRS, PSPRS, EORP and CORP fund managers to pay, from fund assets, through December 31, 2003, 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.
4. Requires ASRS, PSPRS, EORP and CORP fund managers to pay, from fund assets, through December 31, 2003, 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.
5. Requires the ASRS, PSPRS, EORP and CORP fund managers to pay, from fund assets, through December 31, 2003, 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 $470 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.
6. 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.
7. 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.
8. Applies subsidy increases to survivors.
9. Makes technical and conforming changes.
10. Provides for a retroactive effective date of June 30, 2001.
APPROP 2/27/01 DP 15-0-0-1
3rd
Read 3/12/01 50-0-10-0
Prepared by Senate Staff
March 22, 2001