HOUSE BILL No. 4669 April 24, 2001, Introduced by Reps. Schermesser, Wojno, Dennis, Rich Brown, Shackleton, Neumann, Hale, Whitmer, Minore, Gieleghem, Jacobs and Bogardus and referred to the Committee on Senior Health, Security and Retirement. A bill to amend 1943 PA 240, entitled "State employees' retirement act," by amending sections 20d and 68 (MCL 38.20d and 38.68), section 20d as amended by 1996 PA 532 and section 68 as added by 1996 PA 487. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 20d. (1) On and after July 1, 1974, hospitalization 2 and medical coverage insurance premium payable by any retirant or 3 his or her beneficiary and his or her dependents under any group 4 health plan authorized by the Michigan civil service commission 5 and the department of management and budget shall be paid by the 6 retirement board from the health insurance reserve fund created 7 in section 11.TheEXCEPT AS OTHERWISE PROVIDED IN THIS 8 SECTION, THE amount payable shall be in the same proportion of 9 premium payable by the state of Michigan for the classified 03181'01 MRM 2 1 employees occupying positions in the state civil service. The 2 hospitalization and medical insurance premium payable shall be 3 paid from appropriations made for this purpose to the health 4 insurance reserve fund sufficient to cover the premium payment 5 needed to be made. 6 (2) Effective January 1, 1988, EXCEPT AS OTHERWISE PROVIDED 7 IN THIS SECTION, 90% of the premium payable by a retirant or the 8 retirant's beneficiary and his or her dependents for dental cov- 9 erage or vision coverage, or both, under any group plan autho- 10 rized by the Michigan civil service commission and the department 11 of management and budget shall be paid by the retirement board 12 from the health insurance reserve fund created in section 11. 13 (3) On and after March 31, 1997, the retirement system shall 14 also pay health insurance premiums described in this section in 15 the manner prescribed in section 68. 16 (4) BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY ACT 17 THAT ADDED THIS SUBSECTION, THE PROPORTION OF PREMIUM PAYABLE BY 18 A RETIRANT UNDER THIS SECTION FOR HOSPITALIZATION, MEDICAL COVER- 19 AGE INSURANCE, DENTAL COVERAGE, OR VISION COVERAGE SHALL BE NOT 20 GREATER THAN 125% OF THE PROPORTION OF PREMIUM THAT THE RETIRANT 21 IS REQUIRED TO PAY ON THE EFFECTIVE DATE OF THE AMENDATORY ACT 22 THAT ADDED THIS SUBSECTION. 23 (5)(4)For purposes of this section, "retirant" includes 24 a person who retires under section 306 or 410 of the Michigan 25 military act,Act No. 150 of the Public Acts of 1967, being sec-26tions 32.706 and 32.810 of the Michigan Compiled Laws1967 PA 27 150, MCL 32.706 AND 32.810. 03181'01 3 1 Sec. 68. (1) A former qualified participant may elect 2 health insurance benefits in the manner prescribed in this sec- 3 tion if he or she meets both of the following requirements: 4 (a) The former qualified participant is vested in health 5 benefits under section 64(2). 6 (b) The former qualified participant meets or exceeds the 7 benefit commencement age employed in the actuarial present value 8 calculation under section 51 and the service requirements that 9 would have applied to that former participant under Tier 1 for 10 receiving health insurance coverage under section 20d, if that 11 former participant was a member of Tier 1. 12 (2) A former qualified participant who is eligible to elect 13 health insurance coverage under subsection (1) may elect health 14 insurance coverage in a health benefit plan or plans as autho- 15 rized by section 20d, or in another plan as provided in subsec- 16 tion (6). A former qualified participant who is eligible to 17 elect health insurance coverage under subsection (1) may also 18 elect health insurance coverage for his or her health benefit 19 dependents, if any. A surviving health benefit dependent of a 20 deceased former qualified participant who is eligible to elect 21 health insurance coverage under subsection (1) may elect health 22 insurance coverage in the manner prescribed in this section. 23 (3) Except as otherwise provided in subsection (6), an indi- 24 vidual who elects health insurance coverage under this section 25 shall become a member of a health insurance coverage group autho- 26 rized pursuant to section 20d. 03181'01 4 1 (4) For a former qualified participant who is eligible to 2 elect health insurance coverage under subsection (1) and who is 3 vested in those benefits under section 64(2)(a), and for his or 4 her health benefit dependents, this state shall pay a portion of 5 the health insurance premium as calculated under this subsection 6 on a cash disbursement method. An individual described in this 7 subsection who elects health insurance coverage under this sec- 8 tion shall pay to the retirement system the remaining portion of 9 the health insurance coverage premium not paid by this state 10 under this subsection.TheEXCEPT AS OTHERWISE PROVIDED IN 11 THIS SECTION, THE portion of the health insurance coverage pre- 12 mium paid by this state under this subsection shall be equal to 13 the product of 3% and the former qualified participant's years of 14 service, up to 30 years, and shall not exceed 90% of the payments 15 for health insurance coverage under section 20d. If the individ- 16 ual elects the health insurance coverage provided under section 17 20d, the state shall transfer its portion of the amount calcu- 18 lated under this subsection to the health insurance reserve fund 19 created by section 11. 20 (5) For a former qualified participant who is eligible to 21 elect health insurance coverage under subsection (1) and who is 22 vested in those benefits under section 64(2)(b), and for his or 23 her health benefit dependents, this state shall pay a portion of 24 the health insurance premium as calculated under this subsection 25 on a cash disbursement method. An individual described in this 26 subsection who elects health insurance coverage under this 27 section shall pay to the retirement system the remaining portion 03181'01 5 1 of the health insurance coverage premium not paid by this state 2 under this subsection. The portion of the health insurance cov- 3 erage premium paid by this state under this subsection shall be 4 equal to the premium amounts paid on behalf of retirants of Tier 5 1 for health insurance coverage under section 20d. If the indi- 6 vidual elects the health insurance coverage provided under sec- 7 tion 20d, the state shall transfer its portion of the amount cal- 8 culated under this subsection to the health insurance reserve 9 fund created by section 11. 10 (6) A former qualified participant or health benefit depen- 11 dent who is eligible to elect health insurance coverage under 12 this section and who elects health insurance coverage under a 13 different plan than the plan authorized under section 20d may 14 elect to have an amount up to the amount of the retirement 15 system's share of the monthly health insurance premium subsidy 16 provided in this section paid by the retirement system directly 17 to the other health insurance plan or to a medical savings 18 account established pursuant to section 220 of the internal reve- 19 nue code, to the extent allowed by law or under the provisions 20 and procedures of Tier 2. 21 (7) BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY ACT 22 THAT ADDED THIS SUBSECTION, THE PROPORTION OF PREMIUM PAYABLE BY 23 A RETIRANT UNDER THIS SECTION FOR HEALTH INSURANCE BENEFITS SHALL 24 BE NOT GREATER THAN 125% OF THE PROPORTION OF PREMIUM THAT THE 25 RETIRANT IS REQUIRED TO PAY ON THE EFFECTIVE DATE OF THE AMENDA- 26 TORY ACT THAT ADDED THIS SUBSECTION. 03181'01 6 1 (8)(7)If the department of management and budget 2 receives notification from the United States internal revenue 3 service that this section or any portion of this section will 4 cause the retirement system to be disqualified for tax purposes 5 under the internal revenue code, then the portion that will cause 6 the disqualification does not apply. 03181'01 Final page. 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