ARIZONA STATE SENATE
Phoenix, Arizona
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 health care
subsidy. Retroactive to July 1, 2001,
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 (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 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). H.B.
2558 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 staff, H.B. 2258 will cost the state general fund
$185,200.
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, PSPRS, EORP or 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. 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.
5. 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.
6. 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.
7. 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.
8. Makes technical and conforming changes.
9. Contains a retroactive date of July 1, 2001.
House Action Senate
Action
RGO 3/22/02 DPA 7-0-1-2 -0 FIN
4/18/02 Discharge Petition
APPROP 4/1/02 DP 9-3-0-4-0
3rd Read 4/8/02 49-0-11-0
Prepared by Senate Staff
April 22, 2002