ARIZONA STATE SENATE
Phoenix, Arizona
retirees; health insurance;
enhanced subsidy
Purpose
Extends, for one additional
year through June 30, 2004, the temporary 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.
Background
Recently, insurance
providers in rural areas of Arizona have stopped offering health maintenance
organization coverage to plan members.
Many providers offer a more costly preferred provider organization as
the only managed care program. In 2001,
the Legislature authorized a temporary health care subsidy for members who live
in nonservice areas (Laws 2001, Chapter 376).
The subsidy temporarily increased 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 for a period of two years. S.B. 1239 extends the duration of this
health care subsidy for one additional year through June 30, 2004.
According to Joint
Legislative Budget Committee staff, the fiscal impact of S.B. 1239 will be a
$159,700 reduction to the state general fund in FY 2003-2004.
Provisions
1. Extends, for one additional year through June 30, 2004, the temporary health care subsidy that requires ASRS, PSPRS, CORP and EORP fund managers to pay from fund assets 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.
2. Extends, for one additional year through June 30, 2004, the temporary health care subsidy that requires ASRS, PSPRS, CORP and EORP fund managers to pay from fund assets 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.
3. Allows a member to elect to purchase individual health care coverage and receive payment for one additional year 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.
4. Makes technical changes.
5. Provides for a general effective date.
Prepared by Senate Staff
March 4, 2002