December 12, 2013, Introduced by Senator CASWELL and referred to the Committee on Appropriations.
A bill to amend 1980 PA 300, entitled
"The public school employees retirement act of 1979,"
by amending section 91 (MCL 38.1391), as amended by 2012 PA 300.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 91. (1) Except as otherwise provided in this section, the
retirement system shall pay the entire monthly premium or
membership or subscription fee for hospital, medical-surgical, and
sick care benefits for the benefit of a retirant or retirement
allowance beneficiary who elects coverage in the plan authorized by
the retirement board and the department. Except as otherwise
provided in this section, beginning January 1, 2013, the retirement
system shall pay 80% of the entire monthly premium or membership or
subscription fee for hospital, medical-surgical, and sick care
benefits for the benefit of a retirant or retirement allowance
beneficiary who elects coverage in the plan authorized by the
retirement board and the department. Except as otherwise provided
in subsections (7) to (15), for a retirant or retirement allowance
beneficiary who is enrolled in the hospital, medical-surgical, and
sick care benefits plan on January 1, 2013 and who is eligible for
medicare on that date, the retirement system shall pay 90% of the
entire monthly premium or membership or subscription fee for
hospital, medical-surgical, and sick care benefits for the benefit
of a retirant or retirement allowance beneficiary who elects
coverage in the plan authorized by the retirement board and the
department. Except as otherwise provided in subsections (7) to (15)
and subject to subsection (16), for a retirant or retirement
allowance beneficiary who has a total household income for the
immediately preceding tax year below 133% of the federal poverty
guidelines, the retirement system shall pay 90% of the entire
monthly premium or membership or subscription fee for hospital,
medical-surgical, and sick care benefits for the benefit of a
retirant or retirement allowance beneficiary who elects coverage in
the plan authorized by the retirement board and the department.
Except as otherwise provided in subsection (8), this subsection
does not apply to a retirant who first becomes a member after June
30, 2008.
(2) The retirement system may pay up to the maximum of the
amount payable under subsection (1) toward the monthly premium for
hospital, medical-surgical, and sick care benefits for the benefit
of a retirant or retirement allowance beneficiary enrolled in a
group health insurance or prepaid service plan not authorized by
the retirement board and the department, if enrolled before June 1,
1975, for whom the retirement system on July 18, 1983 was making a
payment towards his or her monthly premium.
(3) A retirant or retirement allowance beneficiary receiving
hospital, medical-surgical, and sick care benefits coverage under
subsection (1) or (2), until eligible for medicare, shall have an
amount equal to the cost chargeable to a medicare recipient for
part B of medicare deducted from his or her retirement allowance.
(4) Until December 31, 2012, the retirement system shall pay
90% of the monthly premium or membership or subscription fee for
dental and vision benefits for the benefit of a retirant or
retirement allowance beneficiary who elects coverage in the plan
authorized by the retirement board and the department. Except as
otherwise provided in this section, beginning January 1, 2013, the
retirement system shall pay 80% of the monthly premium or
membership or subscription fee for dental and vision benefits for
the benefit of a retirant or retirement allowance beneficiary who
elects coverage in the plan authorized by the retirement board and
the department. Except as otherwise provided in subsections (7) to
(15), for a retirant or retirement allowance beneficiary who is
enrolled in the dental and vision plan on January 1, 2013 and who
is 65 years of age or older on that date, the retirement system
shall pay 90% of the entire monthly premium or membership or
subscription fee for dental and vision benefits for the benefit of
a retirant or retirement allowance beneficiary who elects coverage
in the plan authorized by the retirement board and the department.
Except as otherwise provided in subsections (7) to (15) and subject
to subsection (16), for a retirant or retirement allowance
beneficiary who has a total household income for the immediately
preceding tax year below 133% of the federal poverty guidelines,
the retirement system shall pay 90% of the entire monthly premium
or membership or subscription fee for dental and vision benefits
for the benefit of a retirant or retirement allowance beneficiary
who elects coverage in the plan authorized by the retirement board
and the department. Payments shall begin under this subsection upon
approval by the retirement board and the department of plan
coverage and a plan provider. Except as otherwise provided in
subsection (8), this subsection does not apply to a retirant who
first becomes a member after June 30, 2008.
(5) Until December 31, 2012, the retirement system shall pay
up to 90% of the maximum of the amount payable under subsection (1)
toward the monthly premium or membership or subscription fee for
hospital, medical-surgical, and sick care benefits coverage
described in subsections (1) and (2) for each health insurance
dependent of a retirant receiving benefits under subsection (1) or
(2). Until December 31, 2012, payment shall not exceed 90% of the
actual monthly premium or membership or subscription fee. Except as
otherwise provided in subsections (7) through (15), for a health
insurance dependent who is enrolled in the hospital, medical-
surgical, and sick care benefit plan on January 1, 2013 and who is
eligible for medicare on that date, the retirement system shall pay
90% of the entire monthly premium or membership or subscription fee
for hospital, medical-surgical, and sick care benefits for the
benefit of each health insurance dependent of a retirant receiving
benefits under subsection (1) or (2). Except as otherwise provided
in subsections (7) to (15) and subject to subsection (16), for a
health insurance dependent who has a total household income for the
immediately preceding tax year below 133% of the federal poverty
guidelines, the retirement system shall pay 90% of the entire
monthly premium or membership or subscription fee for hospital,
medical-surgical, and sick care benefits for the benefit of each
health insurance dependent of a retirant receiving benefits under
subsection (1) or (2). Until December 31, 2012, the retirement
system shall pay 90% of the monthly premium or membership or
subscription fee for dental and vision benefits described in
subsection (4) for the benefit of each health insurance dependent
of
a retirant receiving benefits under subsection (4). Beginning
Except as otherwise provided in this subsection, beginning January
1, 2013, any payment described in this subsection shall not exceed
80% of the actual monthly premium or membership or subscription
fee. Except as otherwise provided in subsections (7) to (15), for a
health insurance dependent of a retirant who is enrolled in the
dental and vision plan on January 1, 2013 and who is 65 years of
age or older on that date, the retirement system shall pay 90% of
the entire monthly premium or membership or subscription fee for
dental and vision benefits for the benefit of each health insurance
dependent of the retirant receiving benefits under subsection (4).
Except as otherwise provided in subsections (7) to (15) and subject
to subsection (16), for a health insurance dependent of a retirant
who has a total household income for the immediately preceding tax
year below 133% of the federal poverty guidelines, the retirement
system shall pay 90% of the entire monthly premium or membership or
subscription fee for dental and vision benefits for the benefit of
each health insurance dependent of the retirant receiving benefits
under subsection (4). Payment for health benefits coverage for a
health insurance dependent of a retirant shall not be made after
the retirant's death, unless the retirant designated a retirement
allowance beneficiary as provided in section 85 and the dependent
was covered or eligible for coverage as a health insurance
dependent of the retirant on the retirant's date of death. Payment
for health benefits coverage shall not be made for a health
insurance dependent after the later of the retirant's death or the
retirement allowance beneficiary's death. Payment under this
subsection and subsection (6) began October 1, 1985 for health
insurance dependents who on July 10, 1985 were covered by the
hospital, medical-surgical, and sick care benefits plan authorized
by the retirement board and the department. Payment under this
subsection and subsection (6) for other health insurance dependents
shall not begin before January 1, 1986. Except as otherwise
provided in subsection (8), this subsection does not apply to a
retirant who first becomes a member after June 30, 2008.
(6) The payment described in subsection (5) shall also be made
for each health insurance dependent of a deceased member or
deceased duty disability retirant if a retirement allowance is
being paid to a retirement allowance beneficiary because of the
death of the member or duty disability retirant as provided in
section 43c(c), 89, or 90. Payment for health benefits coverage for
a health insurance dependent shall not be made after the retirement
allowance beneficiary's death.
(7) The payments provided by this section shall not be made on
behalf of a retiring section 82 deferred member or health insurance
dependent of a deferred member having less than 21 full years of
attained credited service or the retiring deferred member's
retirement allowance beneficiary, and shall not be made on behalf
of a retirement allowance beneficiary of a deferred member who dies
before retiring. The retirement system shall pay, on behalf of a
retiring section 82 deferred member or health insurance dependent
of a deferred member or a retirement allowance beneficiary of a
deceased deferred member, either of whose allowance is based upon
not less than 21 years of attained credited service, 10% of the
payments provided by this section, increased by 10% for each
attained full year of credited service beyond 21 years, not to
exceed 100% of the payments provided by this section. This
subsection applies to any member who first became a member on or
before June 30, 2008 and attains deferred status under section 82
after October 31, 1980.
(8) For a member or deferred member who first becomes a member
after June 30, 2008 and before September 4, 2012, the retirement
system shall pay up to 80% of the monthly premium or membership or
subscription fee for the hospital, medical-surgical, and sick care
benefits plan, the dental plan, and vision plan, or any combination
of the plans for the benefit of the retirant and his or her
retirement allowance beneficiary and health insurance dependents,
or for the benefit of the deceased member's retirement allowance
beneficiary if the retirant or deceased member has 25 years or more
of service credit under this act, and the retirant, deceased
retirant, or deceased member was at least 60 years of age at the
time of application for benefits under this section. If the
retirant or deceased member is less than 60 years of age at the
time of application for benefits under this section, the retirement
system shall pay 80% of the monthly premium or membership or
subscription fee for the hospital, medical-surgical, and sick care
benefits plan, the dental plan, and vision plan, or any combination
of the plans for the benefit of the retirant and his or her
retirement allowance beneficiary and the retirant's health
insurance dependents, or for the benefit of the deceased member's
retirement allowance beneficiary if the retirant or deceased member
has 25 or more years of service credit granted under section 68. If
a retirant, deceased retirant, or deceased member described in this
subsection has 10 or more but less than 25 years of service credit
under this act and the retirant was at least 60 years of age at the
time of application for benefits under this section, the retirement
system shall pay a portion of the monthly premium or membership or
subscription fee for the plans or combination of plans equal to the
product of 3% and the retirant's, deceased retirant's, or deceased
member's years of service for the first 10 years and 4% for each
year after the first 10 years, up to 80%. This subsection does not
apply to a member who receives a disability retirement allowance
under section 86 or 87 or to a deceased member's retirement
allowance beneficiary under section 90.
(9) The retirement system shall not pay the premiums or
membership or subscription fees under subsection (8) until the
retirant or retirement allowance beneficiary requests enrollment in
the plans or combination of plans in writing in the manner
prescribed by the retirement system. Not more than 1 year of
service credit shall be counted for purposes of this subsection and
subsection (8) in any school fiscal year.
(10) A member who retires under section 43b or 81 and who
elects to purchase service credit on or after July 1, 2008 is not
eligible for payments under this section for the hospital, medical-
surgical, and sick care benefits plan, the dental plan, or vision
plan, or any combination of the plans described in this section
until the first date that the member would have been eligible to
retire under section 43b or 81 if he or she had not purchased the
service credit and had accrued a sufficient amount of service
credit under section 68. A member who first becomes a member on or
after July 1, 2008 shall not be eligible for health benefits under
this subsection until at least the time of application under
subsection (8). The retirement system shall apply a method that
enables it to make the determination under this subsection.
(11) Except for a member who retires under section 86 or 87 or
a member who meets the requirements under subsection (7) or (8),
the retirement system shall not pay the benefits provided in
subsection (1) or (4) unless the member was employed and has
received a minimum total of 1/2 of a year of service credit granted
pursuant
to under section 68 during the 2 school fiscal years
immediately preceding the member's retirement allowance effective
date or the member has received a minimum of 1/10 of a year of
service
credit granted pursuant to under
section 68 during each of
the 5 school fiscal years immediately preceding the member's
retirement allowance effective date. This subsection does not apply
to a member who is unable to meet the service credit requirements
of this subsection because of 1 or more periods of unpaid leaves of
absence approved by the reporting unit during the period of leave
of absence, as a result of a mental or physical disability
supported by the member's doctor during the period of leave of
absence.
(12) Any retirant or retirement allowance beneficiary excluded
from payments under this section may participate in the hospital,
medical-surgical, and sick care benefits plan, the dental plan, or
vision plan, or any combination of the plans described in this
section in the manner prescribed by the retirement system at his or
her own cost.
(13) The hospital, medical-surgical, and sick care benefits
plan, dental plan, and vision plan that covers retirants,
retirement allowance beneficiaries, and health insurance dependents
pursuant
to under this section shall contain a coordination of
benefits provision that provides all of the following:
(a) If the person covered under the hospital, medical-
surgical, and sick care benefits plan is also eligible for medicare
or medicaid, or both, then the benefits under medicare or medicaid,
or both, shall be determined before the benefits of the hospital,
medical-surgical,
and sick care benefits plan provided pursuant to
under this section.
(b) If the person covered under any of the plans provided by
this section is also covered under another plan that contains a
coordination of benefits provision, the benefits shall be
coordinated as provided by the coordination of benefits act, 1984
PA 64, MCL 550.251 to 550.255.
(c) If the person covered under any of the plans provided by
this section is also covered under another plan that does not
contain a coordination of benefits provision, the benefits under
the other plan shall be determined before the benefits of the plan
provided
pursuant to under this section.
(14) Beginning January 1, 2009, upon the death of the
retirant, a retirement allowance beneficiary who became a
retirement allowance beneficiary under section 85(8) or (9) is not
a health insurance dependent and is not entitled to health benefits
under this section except as provided in this subsection. Beginning
January 1, 2009, a surviving spouse selected as a retirement
allowance beneficiary under section 85(8) or (9) may elect the
insurance coverages provided in this section if payment for the
elected coverages is the responsibility of the surviving spouse and
is paid in a manner prescribed by the retirement system.
(15) This section does not apply to a retirant or a health
insurance dependent of that retirant under either of the following
circumstances:
(a) The individual first became a member or qualified
participant on or after September 4, 2012.
(b) The member made the election to opt out of health
insurance coverage or receives a separate retirement allowance
under section 91a.
(16) The department shall develop a method for a retirant,
retirement allowance beneficiary, or health insurance dependent of
a retirant to prove eligibility for the 90% premium or fee payment
by the retirement system under this section. The department shall
use the retirant's, retirement allowance beneficiary's, or health
insurance dependent's most recent income tax return from this
state, if applicable, or from the individual's state of residence
to determine eligibility under this section. Upon confirming a
retirant's, retirement allowance beneficiary's, or health insurance
dependent's eligibility, the department shall apply the 90% premium
or fee payment from the date the application was received from that
individual. The department shall apply reasonable controls
consistent with this state's income tax return audit policies and
practices to ensure that eligibility for the 90% premium or fee
payment under this section is maintained by that individual. The
department shall take corrective action to apply the appropriate
deductions when the department determines that an individual is no
longer eligible for the 90% premium or fee payment under this
section. The department shall develop a method for identifying
individuals who are eligible for the 90% premium or fee payment
under this section by examining an individual's income tax return
in the year before the individual's year of retirement and to
automatically apply the 90% premium or fee payment, if feasible.
The department shall submit its proposed plan to implement this
section to the legislature by June 1, 2014.
(17) (16)
For purposes of this section:
(a) "Federal poverty guidelines" means the federal poverty
guidelines published annually in the federal register by the United
States department of health and human services under its authority
to revise the poverty line under 42 USC 9902.
(b) (a)
"Health insurance
dependent" means any of the
following:
(i) Except as provided in subsection (14), the spouse of the
retirant or the surviving spouse to whom the retirant or deceased
member was married at the time of the retirant's or deceased
member's death.
(ii) An unmarried child, by birth or adoption, of the retirant
or deceased member, until December 31 of the calendar year in which
the child becomes 19 years of age.
(iii) An unmarried child, by birth or adoption, of the retirant
or deceased member, until December 31 of the calendar year in which
the child becomes 25 years of age, who is enrolled as a full-time
student, and who is or was at the time of the retirant's or
deceased member's death a dependent of the retirant or deceased
member as defined in section 152 of the internal revenue code, 26
USC 152.
(iv) An unmarried child, by birth or adoption, of the retirant
or deceased member who is incapable of self-sustaining employment
because of mental or physical disability, and who is or was at the
time of the retirant's or deceased member's death a dependent of
the retirant or deceased member as defined in section 152 of the
internal revenue code, 26 USC 152.
(v) The parents of the retirant or deceased member, or the
parents of his or her spouse, who are residing in the household of
the retirant or retirement allowance beneficiary.
(vi) An unmarried child who is not the child by birth or
adoption of the retirant or deceased member but who otherwise
qualifies to be a health insurance dependent under subparagraph
(ii), (iii), or (iv), if the retirant or deceased member is the legal
guardian of the unmarried child.
(c) (b)
"Medicaid" means benefits
under the federal medicaid
program established under title XIX of the social security act, 42
USC 1396 to 1396w-5.
(d) (c)
"Medicare" means benefits
under the federal medicare
program established under title XVIII of the social security act,
42
USC 1395 to 1395kkk.1395kkk-1.