=======

art.002/2/002/1

1-1

ARTICLE 2 AS AMENDED

1-2

RELATING TO MEDICARE EXCHANGE PROGRAM FOR MEDICARE ELIGIBLE

1-3

RETIREES

1-4

     SECTION 1. Sections 36-12-1 and 36-12-4 of the General Laws in Chapter 36-12

1-5

entitled "Insurance Benefits" are hereby amended to read as follows:

1-6

     36-12-1. Definitions. -- The following words, as used in sections 36-12-1 -- 36-12-14,

1-7

shall have the following meanings:

1-8

      (1) "Employer", means the state of Rhode Island.

1-9

      (2) "Employee", means all persons who are classified employees as the term "classified

1-10

employee" is defined under section 36-3-3, and all persons in the unclassified and non-classified

1-11

service of the state; provided, however, that the following shall not be included as "employees"

1-12

under sections 36-12-1 -- 36-12-14:

1-13

      (i) Part-time personnel whose work week is less than twenty (20) hours a week and

1-14

limited period and seasonal personnel;

1-15

      (ii) Members of the general assembly, its clerks, doorkeepers, and pages.

1-16

      (3) "Dependents" means an employee's spouse, domestic partner and unmarried children

1-17

under nineteen (19) years of age. Domestic partners shall certify by affidavit to the benefits

1-18

director of the division of personnel that the (i) partners are at least eighteen (18) years of age and

1-19

are mentally competent to contract, (ii) partners are not married to anyone, (iii) partners are not

1-20

related by blood to a degree which would prohibit marriage in the state of Rhode Island, (iv)

1-21

partners reside together and have resided together for at least one year, (v) partners are financially

1-22

interdependent as evidenced by at least two (2) of the following: (A) domestic partnership

1-23

agreement or relationship contract; (B) joint mortgage or joint ownership of primary residence,

1-24

(C) two (2) of: (I) joint ownership of motor vehicle; (II) joint checking account; (III) joint credit

1-25

account; (IV) joint lease; and/or (D) the domestic partner has been designated as a beneficiary for

1-26

the employee's will, retirement contract or life insurance. Misrepresentation of information in the

1-27

affidavit will result in an obligation to repay the benefits received, and a civil fine not to exceed

1-28

one thousand dollars ($1000) enforceable by the attorney general and payable to the general fund.

1-29

The employee will notify the benefits director of the division of personnel by completion of a

1-30

form prescribed by the benefits director when the domestic partnership ends.

1-31

      (4) "Retired employee", means all persons retired from the active service of the state,

1-32

who, immediately prior to retirement, were employees of the state as determined by the

2-1

retirement board under section 36-8-1, and also all retired teachers who have elected to come

2-2

under the employees' retirement system of the state of Rhode Island.

2-3

     (5) "State retiree", means all persons retired from the active service of the state who,

2-4

immediately prior to retirement, were employees of the state as determined by the retirement

2-5

board under section 36-8-1.

2-6

     (6) "Teacher retiree", means all retired teachers who have elected to come under the

2-7

employees' retirement system of the state of Rhode Island.

2-8

      (5)(7) "Long-term health care insurance", means any insurance policy or rider

2-9

advertised, marketed, offered, or designed to provide coverage for not less than twelve (12)

2-10

consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other

2-11

basis for one or more necessary or medically necessary diagnostic, preventive, therapeutic,

2-12

rehabilitative, maintenance, or personal care services, provided in a setting other than an acute

2-13

care unit of a hospital. The term includes: group and individual policies or riders whether issued

2-14

by insurers, fraternal benefit societies, nonprofit health, hospital, and medical service

2-15

corporations; prepaid health plans, health maintenance organizations; or any similar organization.

2-16

Long-term health care insurance shall not include: any insurance policy which is offered

2-17

primarily to provide basic medicare supplement coverage; basic hospital expense coverage; basic

2-18

medical-surgical expense coverage; hospital confinement indemnity coverage; major medical

2-19

expense coverage; disability income protection coverage; accident only coverage; specified

2-20

disease or specified accident coverage; or limited benefit health coverage. This list of excluded

2-21

coverages is illustrative and is not intended to be all inclusive.

2-22

      (6)(8) "Non-Medicare-eligible retiree "Retiree health care insurance", means the health

2-23

benefit employees who retire from active service of the state (subsequent to July 1, 1989), who

2-24

immediately prior to retirement were employees of the state as determined by the retirement

2-25

board pursuant to section 36-8-1, shall be entitled to receive, until attaining Medicare eligibility.

2-26

which This health care insurance shall be equal to semi-private hospital care, surgical/medical

2-27

care and major medical with a one hundred seventy-five dollar ($175) calendar year deductible.

2-28

Employees who retire prior to age sixty-five (65) shall, upon the attainment of Medicare

2-29

eligibility, receive hospital care, surgical/medical services, rights and benefits which, when taken

2-30

together with their federal Medicare program benefits (public law 89-97), 42 U.S.C. section 1305

2-31

et seq., shall be comparable to those provided for retirees prior to that age. The aforementioned

2-32

program will be provided on a shared basis in accordance with section 36-12-4.

2-33

     (9) "Medicare-eligible retiree health care insurance", means the health benefit employees

2-34

who retire from active service of the state (subsequent to July 1, 1989), who immediately prior to

3-1

retirement were employees of the state as determined by the retirement board pursuant to section

3-2

36-8-1, shall have access to when eligible for Medicare. This health care insurance shall include

3-3

plans providing hospital care, surgical/medical services, rights and benefits which, when taken

3-4

together with their federal Medicare program benefits, 42 U.S.C. section 1305 et seq., shall be

3-5

comparable to those provided for retirees prior to the attainment of Medicare eligibility.

3-6

     (10) "Health reimbursement arrangement", or "HRA" means an account that:

3-7

     (i) Is paid for and funded solely by state contributions;

3-8

     (ii) Reimburses a Medicare-eligible state retiree for medical care expenses as defined in

3-9

section 213(d) of the Internal Revenue Code of 1986, as amended, which includes

3-10

reimbursements for health care insurance premiums;

3-11

     (iii) Provides reimbursements up to a maximum dollar amount for a coverage period; and

3-12

     (iv) Provides that any unused portion of the maximum dollar amount at the end of a

3-13

coverage period is carried forward to increase the maximum reimbursement amount in

3-14

subsequent coverage periods.

3-15

     36-12-4. Coverage of retired employees Coverage of Non-Medicare-eligible retired

3-16

employees. -- (a) Non-Medicare-eligible retired Retired employees who retire retired on or before

3-17

September 30, 2008. - Any retired employee who retired on or before September 30, 2008 shall

3-18

be entitled, until attaining Medicare eligibility, to be covered under sections 36-12-1 -- 36-12-5

3-19

for himself and herself and, if he or she so desires, his or her non-Medicare-eligible dependents,

3-20

upon agreeing to pay the total cost of his or her contract at the group rate for active state

3-21

employees. Payments of any non-Medicare-eligible retired employee for coverage shall be

3-22

deducted from his or her retirement allowance and remitted from time to time in payment for such

3-23

contract. In addition, any retired employee who retired on or before September 30, 2008 shall be

3-24

permitted to purchase coverage for his or her non-Medicare-eligible dependents upon agreeing to

3-25

pay the additional cost of the contract at the group rate for active state employees. Payment for

3-26

coverage for these dependents shall be deducted from his or her retirement allowances and

3-27

remitted as required in payment for the contract.

3-28

     (b) Non-Medicare-eligible State state employees retirees who retire retired subsequent to

3-29

July 1, 1989, and on or before September 30, 2008. Non-Medicare-eligible state retirees State

3-30

employees who retire retired subsequent to July 1, 1989, and on or before September 30, 2008,

3-31

from active service of the state, and who were employees of the state as determined by the

3-32

retirement board under section36-8-1, shall be entitled to receive for himself or herself non-

3-33

Medicare-eligible a retiree health care insurance benefit as described in section36-12-1 in

3-34

accordance with the following formula:

4-1

     Years of Age State's Employee's

4-2

      Service at Retirement Share Share

4-3

      10-15 60 50% 50%

4-4

      16-22 60 70% 30%

4-5

      23-27 60 80% 20%

4-6

      28+ -- 90% 10%

4-7

      28+ 60 100% 0%

4-8

      35+ any 100% 0%

4-9

     If the retired employee is receiving a subsidy on September 30, 2008, the state will

4-10

continue to pay the same subsidy share until the retiree attains age sixty-five (65).

4-11

     Until December 31, 2013, when When the state retiree reaches that age which will

4-12

qualify him or her for Medicare supplement, the formula shall be:

4-13

     Years of Service State's Contribution Employees' Share

4-14

      10 – 15 50% 50%

4-15

      16 – 19 70% 30%

4-16

      20 – 27 90% 10%

4-17

      28+ 100% 0%

4-18

     (c) Non-Medicare-eligible retired Retired employees who retire on or after October 1,

4-19

2008. Any retired employee who retires on or after October 1, 2008 shall be entitled, until

4-20

attaining Medicare eligibility, to be covered under sections 36-12-1 – 36-12-5 for himself and

4-21

herself and, if he or she so desires, his or her non-Medicare-eligible dependents, upon agreeing to

4-22

pay the total cost of the contract in the plan in which he or she enrolls. Payments of any non-

4-23

Medicare-eligible retired employee for coverage shall be deducted from his or her retirement

4-24

allowance and remitted from time to time in payment for such contract. Any retired employee

4-25

who retires on or after October 1, 2008, shall be permitted to purchase coverage for his or her

4-26

non-Medicare-eligible dependents upon agreeing to pay the additional cost of the contract at the

4-27

group rate for the plan in which the dependent is enrolled. Payment for coverage for these

4-28

dependents shall be deducted from the retired employee's retirement allowances and remitted as

4-29

required in payment for the contract. The Director of Administration shall develop and present to

4-30

the chairpersons of the House Finance Committee and the Senate Finance Committee by May 23,

4-31

2008 a retiree health plan option or options to be offered to retirees eligible for state-sponsored

4-32

medical coverage who are under age sixty-five (65) or are not eligible for Medicare. This plan

4-33

will have a reduced benefit level and will have an actuarially based premium cost not greater than

4-34

the premium cost of the plan offered to the active state employee population. This new plan

5-1

option will be available to employees retiring after September 30, 2008, and their non-Medicare-

5-2

eligible dependents.

5-3

     (d) Non-Medicare-eligible State state employees retirees who retire on or after October 1,

5-4

2008. Employees Non-Medicare-eligible state retirees who retire on or after October 1, 2008

5-5

from active service of the state, and who were employees of the state as determined by the

5-6

retirement board under section 36-8-1, and who have a minimum of twenty (20) years of service,

5-7

and who are a minimum of fifty-nine (59) years of age, shall be entitled to receive for himself or

5-8

herself a non-Medicare-eligible retiree health care insurance benefit as described in section 36-

5-9

12-1. The State state will subsidize 80% of the cost of the health insurance plan for individual

5-10

coverage in which the retired state employee retiree is enrolled in. Payments of any retired

5-11

employee for coverage shall be deducted from his or her retirement allowance and remitted from

5-12

time to time in payment for such contract.

5-13

     (e) Medicare-eligible state retirees who retire on or after October 1, 2008. Until

5-14

December 31, 2013, the state shall subsidize eighty percent (80%) of the cost of the Medicare-

5-15

eligible health insurance plan for individual coverage in which the state retiree is enrolled,

5-16

provided the employee retired on or after October 1, 2008; has a minimum of twenty (20) years of

5-17

service; and is a minimum of fifty-nine (59) years of age. Payments for coverage shall be

5-18

deducted from his or her retirement allowance and remitted from time to time in payment for such

5-19

health insurance plan.

5-20

     (e)(f) Retired employees, including retired teachers, who are non-Medicare-eligible and

5-21

who reach the age of sixty-five (65) shall be allowed to continue to purchase group health care

5-22

insurance benefits in the same manner as those provided to retired employees who have not

5-23

reached the age of sixty-five (65).

5-24

     SECTION 2. Chapter 36-12 of the General Laws entitled "Insurance Benefits" is hereby

5-25

amended by adding thereto the following section:

5-26

     36-12-4.1. Coverage of Medicare-eligible retired employees. -- (a) The director of the

5-27

department of administration shall ensure retired employees access to Medicare-eligible retiree

5-28

health care insurance. Under this program, the state will establish a health reimbursement account

5-29

(HRA) funded by state contributions for each Medicare-eligible state retiree who elects to receive

5-30

health care insurance through the state-sponsored program.

5-31

     (b) The funds contained in the HRA may be utilized for any eligible medical care

5-32

expenses as defined in section 213(d) of the Internal Revenue Code of 1986, as amended, which

5-33

includes reimbursements for health care insurance premiums.

6-34

     (c) The director of the department of administration shall procure services to maximize

6-35

consumer choice and options with respect to the individual policies available to Medicare-eligible

6-36

retirees.

6-37

     (d) The maximum state contribution to each Medicare-eligible state retiree's HRA

6-38

account will be equal to the lowest-cost Medicare supplemental plan that is filed with the Office

6-39

of the Health Insurance Commissioner of Rhode Island, that is available through the state-

6-40

sponsored program, and that meets the provisions of the Medicare-eligible retiree health care

6-41

insurance benefit defined in section 36-12-1(9). The maximum state contribution will vary by age

6-42

as specified by the rates set forth in the Medicare supplemental plan filing.

6-43

      (e) For Medicare-eligible state retirees who retired before September 30, 2008, effective

6-44

January 1, 2014, the state of Rhode Island will credit an amount to each retiree's HRA account on

6-45

a monthly basis. The amount of such credit shall be calculated based on the retiree's years of

6-46

service, as a percentage of the maximum state contribution set forth in (d) above, and in

6-47

accordance with the following formula:

6-48

     Years of Service State's Contribution Employees Share

6-49

      10 – 15 50% 50%

6-50

      16 – 19 70% 30%

6-51

      20 – 27 90% 10%

6-52

      28+ 100% 0%

6-53

     (f) For Medicare-eligible state retirees who retire on or after October 1, 2008, effective

6-54

January 1, 2014, the state of Rhode Island will credit monthly an amount to each retiree's HRA

6-55

account equal to 80% of the maximum state contribution set forth in (d) above, provided the

6-56

retiree has a minimum of twenty (20) years of service and is at least fifty-nine (59) years of age.

6-57

     (g) Medicare-eligible teacher retirees may purchase the individual policies available to

6-58

Medicare-eligible state retirees under the state-sponsored program.

6-59

     SECTION 3. This article shall take effect as of July 1, 2013.