ARIZONA STATE SENATE
Phoenix, Arizona
REVISED
retirees; health insurance;
enhanced subsidy
Purpose
Retroactive to July 1, 2001,
includes in the definition of “nonservice area” locations outside Arizona, for
the purposes of administering a temporary rural retiree healthcare
subsidy.
Background
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. In
2001, the Legislature authorized a temporary health care subsidy for retired
members who live in nonservice areas and defined “nonservice area” as an area
in Arizona that the Arizona State Retirement System (ASRS), the Department of
Administration (ADOA) or a participating employer does not provide an HMO
program for which the member is eligible (Laws 2001, Chapter 376). S.B. 1239 sunsets the current definition of
a “nonservice area” and replaces it with a broader definition to include
locations outside of Arizona. This
measure also allows a member to elect to purchase individual health care
coverage and receive payment for one additional year through June 30, 2004.
According to Joint
Legislative Budget Committee (JLBC) staff, extending the current temporary
health insurance subsidies to out of state retirees will negatively impact the
state general fund by $25,500 and other appropriated funds by $8,600. Additionally, JLBC staff estimates this
measure will impact local government and nonappropriated funds in FY 2003-2004
by approximately $0.2 million.
Provisions
1. Defines, beginning July 1, 2002, a “nonservice area” as a county in this State with a population of less than 200,000 or a location outside of Arizona.
2. Clarifies that, even if an ASRS, a Public Safety Personnel Retirement System (PSPRS), Elected Officials Retirement Program (EORP) or Corrections Officers Retirement Program (CORP) member resides in an eligible county or a location outside of Arizona, the member will not be considered to be in a “nonservice area” if the member can enroll in an HMO that is offered by ASRS, ADOA or a participating employer.
3. Clarifies that an ASRS, PSPRS, EORP or CORP member’s eligibility to join an HMO in a different county from which he lives does not disqualify him from receiving the temporary health care subsidy.
4. 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 employer if that employee assumes the administrative functions associated with the payment.
5. Makes technical and conforming changes.
6. Contains a retroactive date of July 1, 2001.
1.
Maintains
the current timeframe (through June 30, 2003) for the administration of the
temporary health care premium subsidy for members of ASRS, PSPRS, CORP and EORP
in areas where no managed care program is available.
2.
Sunsets
the current definition of a “nonservice area” and replaces it with a broader
definition to include locations outside of Arizona for the purposes of
administering a temporary rural retiree health care subsidy.
Senate Action
FIN 3/18/02
DPA 6-0-2-0
Prepared by Senate Staff
March 19, 2002