House of Representatives

SB 1239

retirees; health insurance; enhanced subsidy

Sponsors: Senators Arzberger, Brown, Rios, Guenther, et al

 

DPA

Committee on Retirement and Government Operations

Dp

Committee on Appropriations

X

Caucus and COW

 

Third Read

 

 

As Passed the House

 

SB 1239 makes clarifying changes to the rural health care insurance premium benefits and redefines nonservice area as of July 1, 2002.

 

Current Status

SB 1239 was amended in the Retirement and Government Operations Committee to extend the temporary rural health care insurance premium benefit subsidy through June 30, 2004, rather than June 30,2003.

SB 1239 passed the Appropriations Committee unamended.

 

History

Health Care Insurance Premium Benefit:

Current law requires Arizona State Retirement System (ASRS), Public Safety Personnel Retirement System (PSPRS), Corrections Officer Retirement Plan (CORP) and Elected Officials’ Retirement Plan (EORP) to pay a portion of the retired member’s health care premium.  The portion of the member’s health care premium that is not covered is paid from the member’s retirement benefit or out of the member’s pocket.  Members with 10 or more years of credited service receive the full premium benefit subsidy.  Statute provides for an incremental schedule based on years of service between five and 9.9-years that entitles members to a portion of the full premium benefit subsidy.  If a member has less than five years of credited service, the member does not qualify for the premium benefit subsidy. 

 

ASRS administers the group health and accident insurance program for all eligible retired and disabled members and their dependents of all four-state retirement systems.  The current health care insurance provider for the ASRS 2002 group insurance program is Pacificare.  The current health care insurance provider for the Arizona Department of Administration (DOA) 2002 group insurance program is Cigna. In addition to these two providers, various public employers across the state have other insurance providers that interface with ASRS in the management of the health care insurance premium benefit program.  Therefore, members must be receiving health and accident insurance coverage from their former public employer or from the program administered by ASRS to qualify for the following insurance premium benefit:

·          Medicare eligible member $100.

·          Non-Medicare eligible member $150.

·          Non-Medicare family coverage $260.

·          Medicare eligible family coverage $170.

·          Combination Medicare and non-Medicare eligible family coverage $215.

 

Temporary Rural Health Care Insurance Premium Benefit (Repeals July 1, 2003):

In addition to the health care premium benefit paid to ASRS, PSPRS, CORP, and EORP retired and disabled members and their dependents, ASRS administers and provides members and their dependents living in areas (nonservice) of the state not served by or eligible to participate in a managed care program (HMO) with the following temporary rural health care insurance premium benefit:

·          Medicare eligible member $170.

·          Non-Medicare eligible member $300.

·          Non-Medicare family coverage $600.

·          Medicare eligible family coverage $350.

·          Combination Medicare and non-Medicare eligible family coverage $470.

 

 

 

ASRS and DOA Retiree Health Insurance Premium Rates Comparison for Plan Year 2002

With Health Care Insurance Premium Benefit Subsidy Indicated

 

Service Area

Nonservice Areas

Coverage and Subsidy

 

Pacificare HMO

Cigna HMO

Cigna HMO Medicare + Choice

Cigna POS

Cigna PPO

Pacificare PPO

Pacificare Senior Supplement

Cigna POS Pima County

Cigna PPO Pima County

Cigna PPO

Pacificare PPO

Pacificare Senior Supplement

Medicare eligible member

 

Subsidy

 

$137

 

$100

 

$208

 

$100

 

$143

 

$100

 

$276

 

$100

 

$338

 

$100

 

N/A

 

 

 

$316

 

$100

 

$240

 

$270

 

$331

 

$270

 

$307

 

$270

 

N/A

 

$270

 

$316

 

$270

Non-Medicare eligible member

 

Subsidy

 

$392

 

$150

 

$234

 

$150

 

N/A

 

 

 

$310

 

$150

 

$380

 

$150

 

$925

 

$150

 

N/A

 

$270

 

$450

 

$373

 

$450

 

$345

 

$450

 

$767

 

$450

 

N/A

Non-Medicare family coverage

 

Subsidy

 

$784

 

$260

 

$586

 

$260

 

N/A

 

$775

 

$260

 

$950

 

$260

 

$1850

 

$260

 

N/A

 

$676

 

$860

 

$932

 

$860

 

$862

 

$860

 

$1538

 

$860

 

N/A

Medicare family coverage

 

Subsidy

 

$274

 

$170

 

$417

 

$170

 

$283

 

$170

 

$552

 

$170

 

$676

 

$170

 

N/A

 

 

 

$632

 

$170

 

$481

 

$520

 

$663

 

$520

 

$614

 

$520

 

N/A

 

$520

 

$632

 

$520

Combination Medicare/Non-Medicare family coverage

 

Subsidy

$529

$666

$708

$1024

 

$215

$457

$551

 

 

 

$215

$422

$527

 

 

 

$215

$605

$729

 

 

 

$215

$741

$893

 

 

 

$215

$1241

$1558

 

 

 

$215

N/A

 

 

 

 

$215

$527

$635

 

 

 

$685

$727

$876

 

 

 

$685

$672

$811

 

 

 

$685

$1085

$1402

 

 

 

$685

N/A

 

 

 

 

$685

 

 

 

Provisions

§         Clarifies that the temporary rural health care insurance premium benefit subsidy is in addition to the permanent health care insurance premium benefit subsidy.

 

·          Applies the incremental health care insurance premium benefit subsidy percentage increase based on years of service between 5 to 10 years to the rural health care insurance premium benefit subsidy.

 

·          Applies the current nonservice area definition retroactively through June 30, 2002, which coincides to its current application.

 

·          Redefines nonservice area beginning July 1, 2002, as:

A county with a population less than 200,000 persons or an area outside this state, unless the member is eligible to enroll in an HMO that is offered by ASRS, DOA or the member’s employer and clarifies that current provisions of law do not disqualify a member from being considered as living in a nonservice area.

 

§         Allows a retired or disabled member to purchase individual health care coverage through the retired member’s employer and receive the temporary rural health care insurance premium benefit subsidy, through June 30, 2004, rather than 2003

 

·          Makes technical and conforming changes.

 

Amendments

SB 1239 was amended in the Retirement and Government Operations Committee as follows:

§         Extends the temporary rural health care insurance premium benefit subsidy through June 30, 2004, rather than June 30, 2003.

 

§         Makes technical and conforming changes.

§          

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§         ---------- DOCUMENT FOOTER ---------

§         45th Legislature                  

§         Second Regular Session       3          April 16, 2002

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§         ---------- DOCUMENT FOOTER ---------