161.675 Hospital and medical benefits and health insurance coverage for eligible recipients of retirement allowances from Teachers' Retirement System -- Applicability to individuals becoming membe - Kentucky Statutes

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161.675 Hospital and medical benefits and health insurance coverage for eligible recipients of retirement allowances from Teachers' Retirement System --
Applicability to individuals becoming members on or after July 1, 2008 --
Health insurance supplement payments -- Coverage for spouses, dependents,
and disabled children of retirees -- Exemption from premium tax. (1) The board of trustees shall arrange by appropriate contract or on a self-insured basis to provide a broad program of group hospital and medical insurance for present and
future eligible recipients of a retirement allowance from the Teachers' Retirement
System. The board of trustees may also arrange to provide health insurance
coverage through an insurer licensed pursuant to Subtitle 38 of KRS Chapter 304
and offering a managed care plan as defined in KRS 304.17A-500 as an alternative
to group hospital and medical insurance for persons eligible for hospital and
medical benefits under this section. The board of trustees may authorize eligible
recipients of a retirement allowance from the Teachers' Retirement System who are
less than age sixty-five (65) to be included in the state-sponsored health insurance
that is provided to active teachers and state employees under KRS 18A.225.
Members who are sixty-five (65) or older and retired for service shall not be eligible
to participate in the state employee health insurance program as described in KRS
18A.225. (2) (a) The coverage provided shall be as set forth in the contracts and the administrative regulations of the board of trustees. The board of trustees may
change the levels of coverage and eligibility conditions to meet the changing
needs of the annuitants and, when necessary, to contain the expenses of the
insurance program within the funds available to finance the insurance
program, except as provided by paragraph (b) of this subsection. The contracts
and administrative regulations shall provide for but not be limited to hospital
room and board, surgical procedures, doctors' care in the hospital, and
miscellaneous hospital costs. An annuitant whose effective date of retirement
is July 1, 1974, and thereafter, must have a minimum of five (5) years'
creditable Kentucky service in the Teachers' Retirement System or five (5)
years of combined creditable service in the state-administered retirement
systems if the member is retiring under the reciprocity provisions of KRS
61.680 and 61.702. An annuitant shall not elect coverage through more than
one (1) of the state-administered retirement systems. The board of trustees
shall offer coverage to the disabled child of an annuitant regardless of the
disabled child's age if the annuitant pays the entire premium for the disabled
child's coverage. A child shall be considered disabled if he has been
determined to be eligible for federal Social Security disability benefits. (b) Individuals who become members of the Kentucky Teachers' Retirement System on or after July 1, 2008, shall not be eligible for benefits under this
section unless the member has at least fifteen (15) or more years of service
credited under KRS 161.500 or another state-administered retirement system. (3) All expenses for benefits under this section shall be paid from the funding provisions contained in KRS 161.420(5), from a trust fund established by the board under 26 U.S.C. sec. 115, premium charges received from the annuitants and the
spouses, and from funds that may be appropriated or allocated by statute. (4) (a) The board of trustees shall determine the amount of health insurance supplement payments that the Teachers' Retirement System will provide to
assist eligible annuitants in paying the cost of their health insurance, based on
the funds available in the medical insurance fund and any trust fund
established by the board for this purpose under 26 U.S.C. sec. 115. The board
of trustees shall establish the maximum monthly amounts of health insurance
supplement payments that will be made by the Kentucky Teachers' Retirement
System for eligible annuitants. The board of trustees shall annually establish
the percentage of the maximum monthly health insurance supplement
payment that will be made, based on age and years of service credit of eligible
recipients of a retirement allowance. Monthly health insurance supplement
payments made by the retirement system may not exceed the amount of the
single coverage insurance premium chosen by the eligible annuitants. In order
to qualify for health insurance supplements, the annuitant must agree to pay
the difference between the insurance premium and the applicable supplement
payment, by payroll deduction from his retirement allowance, or by a payment
method approved by the retirement system. (b) The board shall, effective July 1, 2010, have the authority to charge retired members who are not paying the Standard Medicare Part B premium an
amount equal to the Standard Medicare Part B premium in addition to any
other payments determined by the board to be necessary to contain costs
within the available funding. If the board determines that retired members
who are not paying the Standard Medicare Part B premium should pay the
equivalent of the Standard Medicare Part B premium, the board shall phase in
the premium according to the following schedule:
July 1, 2010............. .................................................. Thirty-three percent (33%)
July 1, 2011........ ....................................................... Sixty-seven percent (67%)
July 1, 2012, and thereafter ................................... One hundred percent (100%) Nothing in this paragraph shall limit the board's authority to change the levels
of coverage, eligibility conditions, or levels of health insurance supplement
for retirees in order to contain costs within available funding. (c) The board of trustees may offer, on a full-cost basis, health care insurance coverage provided by the retirement system to spouses and dependents of
eligible annuitants not otherwise eligible for regular coverage. Recipients of a
retirement allowance from the retirement system must agree to pay the cost of
this coverage by payroll deduction from their retirement allowance or by a
payment method approved by the retirement system. (d) The board of trustees shall offer, on a full-cost basis, health insurance coverage provided by the retirement system to the disabled child of an
annuitant, regardless of the age of the disabled child. A child shall be
considered disabled for purposes of this section if the child has been
determined to be eligible for federal Social Security disability benefits. (5) The board of trustees is empowered to require the annuitant and the annuitant's spouse to pay a premium charge to assist in the financing of the hospital and
medical insurance program. The board of trustees is empowered to pay the expenses
for insurance coverage from the medical insurance fund, from any trust fund
established by the board for this purpose under 26 U.S.C. sec. 115, from the
premium charges received from the annuitants and the spouses, and from funds that
may be appropriated or allocated by statute. The board may provide insurance
coverage by making payment to insurance carriers including health insurance plans
that are available to active and retired state employees and active teachers,
institutions, and individuals for services performed, or the board of trustees may
elect to provide insurance on a "self-insurance" basis or a combination of these
provisions. (6) The board of trustees may approve health insurance supplement payments to eligible annuitants who are less than sixty-five (65) years of age, as reimbursement
for hospital and medical insurance premiums made by annuitants for their
individual coverage. Eligible annuitants or recipients are those annuitants who are
not eligible for Medicare and who do not reside in Kentucky or in an area outside of
Kentucky where comparable coverage is available. The reimbursement payments
shall not exceed the minimum supplement payment that would have been made had
the annuitant lived in Kentucky. Eligible annuitants or recipients shall submit proof
of payment to the retirement system for hospital and medical insurance that they
have obtained. Reimbursement payments shall be made on a quarterly basis. (7) Contracts negotiated may include the provision that a stated amount of hospital cost or period of hospitalization shall incur no obligation on the part of the insurance
carrier or the retirement system or any trust fund established for this purpose by the
board. (8) The board of trustees is empowered to promulgate administrative regulations to assure efficient operation of the hospital and medical insurance program. (9) Premiums paid for hospital and medical insurance coverage procured under authority of this section shall be exempt from any premium tax which might
otherwise be required under KRS Chapter 136. The payment of premiums by the
medical insurance fund or another trust fund established by the board for this
purpose shall not constitute taxable income to an insured recipient. (10) In the event that a member is providing services on less than a full-time basis under KRS 161.605, the retirement system may pay the full cost of the member's health
insurance coverage for the full fiscal year that the member is providing those
services, at the conclusion of which, the retirement system may then bill the active
employer and the active employer shall reimburse the retirement system for the cost
of the health insurance coverage incurred by the retirement system on a pro rata
basis for the time that the member was employed by the active employer. Effective: July 1, 2010
History: Amended 2010 Ky. Acts ch. 159, sec. 5, effective July 1, 2010. -- Amended 2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 41, effective June 27, 2008. -- Amended
2008 Ky. Acts ch. 78, sec. 23, effective July 1, 2008. -- Amended 2006 Ky. Acts
ch. 164, sec. 4, effective July 12, 2006. -- Amended 2002 Ky. Acts ch. 275, sec. 32, effective July 1, 2002. -- Amended 2000 Ky. Acts ch. 438, sec. 4, effective April 21,
2000; and ch. 498, sec. 21, effective July 1, 2000. -- Amended 1998 Ky. Acts
ch. 515, sec. 15, effective July 1, 1998. -- Amended 1996 Ky. Acts ch. 359, sec. 18,
effective July 1, 1996. -- Amended 1994 Ky. Acts ch. 369, sec. 22, effective July 1,
1994.