2014 Arkansas Code
Title 21 - Public Officers and Employees
Chapter 5 - Compensation and Benefits
Subchapter 4 - State and Public School Life and Health Insurance Board
§ 21-5-411 - Eligibility of certain retired employees.

(a) (1) If qualified, state employee retirees and public school employee retirees may continue coverage and participate in the State and Public School Life and Health Insurance Program if the state employee retirees or public school employee retirees are:

(A) Participating members of:

(i) The Arkansas Public Employees' Retirement System, including the members of the legislative division and the contract personnel of the Arkansas National Guard;

(ii) The Arkansas Teacher Retirement System;

(iii) The Arkansas State Highway Employees' Retirement System;

(iv) The Arkansas Judicial Retirement System; or

(v) An alternate retirement plan of a qualifying institution under § 24-7-801; and

(B) Retired and drawing benefits under one (1) or more of the retirement systems listed under subdivision (a)(1)(A) of this section.

(2) (A) (i) If a state employee retiree or a public school employee retiree who is a member of a retirement system listed under subdivision (a)(1)(A) of this section receives retirement benefits, thereby becoming an active retiree, the active retiree may elect to enroll in the program.

(ii) The election to enroll in the program shall be made within thirty-one (31) days of the state employee retiree's or public school employee retiree's becoming an active retiree and shall be made in writing to the Employee Benefits Division of the Department of Finance and Administration on forms required by the division.

(B) (i) To be eligible to continue coverage or to qualify for coverage after electing to decline participation in the program, the retiree must have been eligible for coverage on the last day of the retiree's employment.

(ii) If a retiree declines to participate in the program at the time of retirement due to other health insurance coverage that is not an accident only, specified disease, or other limited benefit policy, the retiree may make a one-time election to participate in the program with proof of continued insurance coverage if the retiree experiences a qualifying event or at the time of open enrollment.

(iii) The State and Public School Life and Health Insurance Board may allocate available subsidies to cover the retirees participating in the program.

(C) (i) Except as provided in subdivision (a)(2)(C)(ii) of this section, an active retiree's failure to make an election to participate in the program during the thirty-one-day election period or an active retiree's election to decline participation in the program is final.

(ii) (a) If an active retiree declining to participate in the program specifies in writing and provides a letter of creditable employer group coverage to show that the reason for the declination is that the active retiree had coverage through another employer group health plan and the active retiree's coverage was subsequently terminated because of a loss of eligibility, as defined by Internal Revenue Service regulations, and provides information from the former insurance company of the loss of eligibility, then the active retiree and any dependents shall qualify for participation in the program upon payment of the appropriate premium as established by the board if the active retiree applies for participation in the program within thirty (30) days of the loss of eligibility.

(b) As used in this subdivision (a)(2)(C)(ii), "loss of coverage" has the meaning provided by Internal Revenue Service and Health Insurance Portability and Accountability Act guidelines for special enrollment periods.

(3) (A) Notwithstanding any other provision to the contrary in this section, a state employee or public school employee with ten (10) or more years of creditable service under the terms of a retirement plan listed in this section shall qualify for continued participation in the program if the state employee or public school employee is separated from employment because of the expiration of a fixed period of employment.

(B) (i) A state employee or public school employee qualifying for continued participation in the program under this subsection shall be considered an inactive retiree and shall have thirty-one (31) days from the effective date of termination to elect to continue participation in the program under this section by notifying the division.

(ii) The election to continue participation in the program shall be made in writing on forms required by the division.

(C) (i) Except as provided in subdivision (a)(3)(C)(ii) of this section, an inactive retiree's failure to elect to continue participation in the program during the thirty-one-day election period or an inactive retiree's election to decline participation in the program is final.

(ii) If an inactive retiree as described in subdivision (a)(3)(B) of this section declining participation in the program specifies in writing that the reason for the declination is that the inactive retiree has coverage through another group health plan and the inactive retiree's coverage is subsequently terminated because of a loss of eligibility, then the inactive retiree and any dependents shall qualify for participation in the program upon payment of the appropriate premium as established by the board, provided the inactive retiree applies for program participation within thirty-one (31) days of the loss of eligibility.

(D) An eligible inactive retiree shall be reclassified as an active retiree upon electing to receive a retirement benefit by a retirement system listed under subdivision (a)(1)(A) of this section and shall be charged the premium rate appropriate for his or her rating category as an active retiree.

(4) (A) As used in this subsection, "loss of eligibility" means a loss of coverage as a result of:

(i) A legal separation;

(ii) Divorce;

(iii) Death of the insured;

(iv) Termination of employment; or

(v) A reduction in the number of hours of employment.

(B) "Loss of eligibility" does not include:

(i) A loss of coverage from a failure to pay premiums on a timely basis;

(ii) Voluntary termination of coverage; or

(iii) A termination of coverage for cause, such as making a fraudulent claim.

(b) (1) Retirees who draw retirement benefits under the Arkansas Public Employees' Retirement System, the Arkansas Teacher Retirement System, or the Arkansas State Highway Employees' Retirement System and retired contract employees of the Arkansas National Guard who wish to participate in the program shall pay the retiree amount of the premium or the cost of the policy issued to the retired participant.

(2) (A) The retiree portion of the premium shall be deducted from:

(i) The retirement benefit check of the retired participant; or

(ii) A bank account of the retired participant, to be paid by a monthly bank draft on the date designated by the division.

(B) If the retirement benefit is to be withheld from a retirement benefit check and the retirement benefit check is not large enough for the premium deduction, the premium shall be paid by monthly bank draft on a designated date prescribed by the division.

(c) Members of the Arkansas Public Employees' Retirement System and the Arkansas State Highway Employees' Retirement System who retire before January 2, 1988, under the Incentives for Early Retirement Act, §§ 24-4-732, 24-5-122, and 24-6-102, shall not pay the full amount of the premium but shall pay a portion of the cost of the policy as set forth by the Incentives for Early Retirement Act, §§ 24-4-732, 24-5-122, and 24-6-102.

(d) Any future change in program participation other than cancellation shall be extended only to newly acquired dependents, except that if an active or inactive retiree declined dependent coverage at the time of election to be an active or inactive retiree and specified in writing that the reason for the declination was that the dependent had other coverage, and if subsequently the dependent involuntarily loses such coverage, except for fraud or voluntary cessation of premium payment while the active or inactive retiree is covered by a plan option offered under the program, then the dependent may be added within thirty-one (31) days of the involuntary termination to the active or inactive retiree's health insurance coverage for payment of the appropriate premium as established by the board.

(e) (1) If a retiree dies and has covered dependents at the time of death, the dependents have the right to continue participation in the program.

(2) Dependent children may continue to participate in the program until marriage or until the maximum age limit for a dependent child has been reached.

(3) A surviving spouse may continue participation in the program.

(4) If a surviving spouse or dependent declines participation in the program or cancels existing participation, then the surviving spouse or dependent has no further privileges under the program.