2014 Kentucky Revised Statutes CHAPTER 61 - GENERAL PROVISIONS AS TO OFFICES AND OFFICERS -- SOCIAL SECURITY FOR PUBLIC EMPLOYEES -- EMPLOYEES RETIREMENT SYSTEM 61.702 Group hospital and medical insurance and managed care plan coverage -- Employee and employer contributions -- Minimum service requirements.
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61.702
Group hospital and medical insurance and managed care plan
coverage -- Employee and employer contributions -- Minimum service
requirements.
(1)
(a)
(b)
1.
The board of trustees of Kentucky Retirement Systems shall
arrange by appropriate contract or on a self-insured basis to provide
a group hospital and medical insurance plan for present and future
recipients of a retirement allowance from the Kentucky Employees
Retirement System, County Employees Retirement System, and
State Police Retirement System, except as provided in subsection
(8) of this section. The board shall also arrange to provide health
care 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 any person eligible for hospital and medical benefits
under this section.
2.
Any person who chooses coverage under a hospital and medical
insurance plan shall pay, by payroll deduction from the retirement
allowance or by another method, the difference in premium between
the cost of the hospital and medical insurance plan coverage and
the benefits to which he would be entitled under this section.
3.
For purposes of this section, "hospital and medical insurance plan"
may include, at the board's discretion, any one (1) or more of the
following:
a.
Any hospital and medical expense policy or certificate,
provider-sponsored integrated health delivery network,
self-insured medical plan, health maintenance organization
contract, or other health benefit plan;
b.
Any health savings account as permitted by 26 U.S.C. sec.
223 or health reimbursement arrangement or a similar account
as may be permitted by 26 U.S.C. sec. 105 or 106. Such
arrangement or account, in the board's discretion, may
reimburse any medical expense permissible under 26 U.S.C.
sec. 213; or
c.
A medical insurance reimbursement program established by
the board through the promulgation of administrative regulation
under which members purchase individual health insurance
coverage through a health insurance exchange established
under 42 U.S.C. sec. 18031 or 18041.
The board may authorize present and future recipients of a retirement
allowance from any of the three (3) retirement systems to be included in
the state employees' group for hospital and medical insurance and shall
provide benefits for recipients equal to those provided to state employees
having the same Medicare hospital and medical insurance eligibility
status, except as provided in subsection (8) of this section.
Notwithstanding the provisions of any other statute, recipients shall be
included in the same class as current state employees in determining
medical insurance policies and premiums.
(c)
(2)
For recipients of a retirement allowance who are not eligible for the same
level of hospital and medical benefits as recipients living in Kentucky
having the same Medicare hospital and medical insurance eligibility
status, the board shall provide a medical insurance reimbursement plan
as described in subsection (7) of this section.
(d) Notwithstanding anything in KRS Chapter 61 to the contrary, the board of
trustees, in its discretion, may take necessary steps to ensure compliance
with 42 U.S.C. secs. 300bb-1 et seq., including but not limited to receiving
contributions and premiums from, and providing benefits pursuant to this
section to, persons entitled to continuation coverage under 42 U.S.C.
secs. 300bb-1 et seq., regardless of whether such persons are recipients
of a retirement allowance.
(a) Each employer participating in the State Police Retirement System as
provided for in KRS 16.505 to 16.652, each employer participating in the
County Employees Retirement System as provided in KRS 78.510 to
78.852, and each employer participating in the Kentucky Employees
Retirement System as provided for in KRS 61.510 to 61.705 shall
contribute to the Kentucky Retirement Systems insurance trust fund the
amount necessary to provide hospital and medical insurance as provided
for under this section. Such employer contribution rate shall be developed
by appropriate actuarial method as a part of the determination of each
respective employer contribution rate to each respective retirement
system determined under KRS 61.565.
(b) 1.
Each employer described in paragraph (a) of this subsection shall
deduct from the creditable compensation of each member having a
membership date on or after September 1, 2008, an amount equal
to one percent (1%) of the member's creditable compensation. The
deducted amounts shall be credited to accounts established
pursuant to 26 U.S.C. sec. 401(h), within the funds established in
KRS 16.510, 61.515, and 78.520.
2.
The employer shall file the contributions as provided by
subparagraph 1. of this paragraph at the retirement office in
accordance with KRS 61.675 and 78.625. Any interest or penalties
paid on any delinquent contributions shall be credited to accounts
established pursuant to 26 U.S.C. sec. 401(h), within the funds
established in KRS 16.510, 61.515, and 78.520. Notwithstanding
any minimum compensation requirements provided by law, the
deductions provided by this paragraph shall be made, and the
compensation of the member shall be reduced accordingly.
3.
Each employer shall submit payroll reports, contributions lists, and
other data as may be required by administrative regulation
promulgated by the board of trustees pursuant to KRS Chapter 13A.
4.
Every member shall be deemed to consent and agree to the
deductions made pursuant to this paragraph, and the payment of
salary or compensation less the deductions shall be a full and
complete discharge of all claims for services rendered by the person
during the period covered by the payment, except as to any benefits
(3)
(a)
provided by KRS 16.505 to 16.652, 61.510 to 61.705, and 78.510 to
78.852. No member may elect whether to participate in, or choose
the contribution amount to accounts established pursuant to 26
U.S.C. sec. 401(h) within the funds established in KRS 16.510,
61.515, and 78.520. The member shall have no option to receive the
contribution required by this paragraph directly instead of having the
contribution paid to accounts established pursuant to 26 U.S.C. sec.
401(h) within the funds established in KRS 16.510, 61.515, and
78.520. No member may receive a rebate or refund of contributions.
If a member establishes a membership date prior to September 1,
2008, pursuant to KRS 61.552(1) or 61.552(23), then this paragraph
shall not apply to the member and all contributions previously
deducted in accordance with this paragraph shall be refunded to the
member without interest. The contribution made pursuant to this
paragraph shall not act as a reduction or offset to any other
contribution required of a member or recipient under KRS 16.505 to
16.652, 61.510 to 61.705, and 78.510 to 78.852.
5.
The board of trustees, at its discretion, may direct that the
contributions required by this paragraph be accounted for within
accounts established pursuant to 26 U.S.C. sec. 401(h) within the
funds established in KRS 16.510, 61.515, and 78.520 through the
use of separate accounts.
The premium required to provide hospital and medical benefits under this
section shall be paid:
1.
Wholly or partly from funds contributed by the recipient of a
retirement allowance, by payroll deduction, or otherwise;
2.
Wholly or partly from funds contributed by the Kentucky Retirement
Systems insurance trust fund;
3.
Wholly or partly from funds contributed to accounts established
pursuant to 26 U.S.C. sec. 401(h) within the funds established in
KRS 16.510, 61.515, and 78.520;
4.
Wholly or partly from funds contributed by another
state-administered retirement system under a reciprocal
arrangement, except that any portion of the premium paid from the
Kentucky Retirement Systems insurance trust fund or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510, 61.515, and 78.520 under a reciprocal
agreement shall not exceed the amount that would be payable
under this section if all the member's service were in one (1) of the
systems administered by the Kentucky Retirement Systems;
5.
Partly from subparagraphs 1. to 4. of this paragraph, except that any
premium for hospital and medical insurance over the amount
contributed by the Kentucky Retirement Systems insurance trust
fund; accounts established pursuant to 26 U.S.C. sec. 401(h) within
the funds established in KRS 16.510, 61.515, and 78.520; or
another state-administered retirement system under a reciprocal
agreement shall be paid by the recipient by an automatic electronic
6.
transfer of funds. If the board provides for cross-referencing of
insurance premiums, the employer's contribution for the working
member or spouse shall be applied toward the premium, and the
Kentucky Retirement Systems insurance trust fund or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510, 61.515, and 78.520 shall pay the
balance, not to exceed the monthly contribution; or
In full from the Kentucky Retirement Systems insurance trust fund or
accounts established pursuant to 26 U.S.C. sec. 401(h) within the
funds established in KRS 16.510, 61.515, and 78.520 for all
recipients of a retirement allowance from any of the three (3)
retirement systems where such recipient is a retired former member
of one (1) or more of the three (3) retirement systems (not a
beneficiary or dependent child receiving benefits) and had two
hundred and forty (240) months or more of service upon retirement.
Should such recipient have less than two hundred forty (240)
months of service but have at least one hundred eighty (180)
months of service, seventy-five percent (75%) of such premium shall
be paid from the insurance trust fund or accounts established
pursuant to 26 U.S.C. sec. 401(h) within the funds established in
KRS 16.510, 61.515, and 78.520, provided such recipient agrees to
pay the remaining twenty-five percent (25%) by payroll deduction
from his retirement allowance or by another method. Should such
recipient have less than one hundred eighty (180) months of service
but have at least one hundred twenty (120) months of service, fifty
percent (50%) of such premium shall be paid from the insurance
trust fund or accounts established pursuant to 26 U.S.C. sec. 401(h)
within the funds established in KRS 16.510, 61.515, and 78.520,
provided such recipient agrees to pay the remaining fifty percent
(50%) by payroll deduction from his retirement allowance or by
another method. Should such recipient have less than one hundred
twenty (120) months of service but have at least forty-eight (48)
months of service, twenty-five percent (25%) of such premium shall
be paid from the insurance trust fund or accounts established
pursuant to 26 U.S.C. sec. 401(h) within the funds established in
KRS 16.510, 61.515, and 78.520, provided such recipient agrees to
pay the remaining seventy-five percent (75%) by payroll deduction
from his retirement allowance or by another method.
Notwithstanding the foregoing provisions of this subsection, an
employee participating in one (1) of the retirement systems
administered by the Kentucky Retirement Systems who becomes
disabled in the line of duty as defined in KRS 16.505(19) or 61.621,
shall have his premium paid in full as if he had two hundred forty
(240) months or more of service. Further, an employee participating
in one (1) of the retirement systems administered by the Kentucky
Retirement Systems who is killed in the line of duty as defined in
KRS 16.505(19) or 61.621, shall have the premium for the
beneficiary, if the beneficiary is the member's spouse, and for each
(b) 1.
2.
3.
4.
5.
dependent child paid so long as they individually remain eligible for
a monthly retirement benefit. "Months of service" as used in this
section shall mean the total months of combined service used to
determine benefits under any or all of the three (3) retirement
systems, except service added to determine disability benefits shall
not be counted as "months of service." For current and former
employees of the Council on Postsecondary Education who were
employed prior to January 1, 1993, and who earn at least fifteen (15)
years of service credit in the Kentucky Employees Retirement
System, "months of service" shall also include vested service in
another retirement system other than the Kentucky Teachers'
Retirement System sponsored by the Council on Postsecondary
Education.
For a member electing insurance coverage through the Kentucky
Retirement Systems, "months of service" shall include, in addition to
service as described in paragraph (a) of this subsection, service
credit in one (1) of the other state-administered retirement plans.
Effective August 1, 1998, the Kentucky Retirement Systems shall
compute the member's combined service, including service credit in
another state-administered retirement plan, and calculate the portion
of the member's premium to be paid by the insurance trust fund
accounts established pursuant to 26 U.S.C. sec. 401(h) within the
funds established in KRS 16.510, 61.515, and 78.520, according to
the criteria established in paragraph (a) of this subsection. Each
state-administered retirement plan annually shall pay to the
insurance trust fund the percentage of the system's cost of the
retiree's monthly contribution for single coverage for hospital and
medical insurance which shall be equal to the percentage of the
member's number of months of service in the other
state-administered retirement plan divided by his total combined
service. The amounts paid by the other state-administered
retirement plans and the insurance trust fund or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510, 61.515, and 78.520 shall not be more
than one hundred percent (100%) of the monthly contribution
adopted by the respective boards of trustees.
A member may not elect coverage for hospital and medical benefits
under this subsection through more than one (1) of the
state-administered retirement plans.
A state-administered retirement plan shall not pay any portion of a
member's monthly contribution for medical insurance unless the
member is a recipient or annuitant of the plan.
The premium paid by the Kentucky Retirement Systems insurance
trust fund or accounts established pursuant to 26 U.S.C. sec. 401(h)
within the funds established in KRS 16.510, 61.515, and 78.520
shall not exceed one hundred percent (100%) of the monthly
contribution rate toward hospital and medical insurance coverage
(4)
(a)
(b)
(c)
approved by the board of trustees of the Kentucky Retirement
Systems.
Group rates under the hospital and medical insurance plan shall be made
available to the spouse, each dependent child, and each disabled child,
regardless of the disabled child's age, of a recipient who is a former
member or the beneficiary, if the premium for the hospital and medical
insurance for the spouse, each dependent child, and each disabled child,
or beneficiary is paid by payroll deduction from the retirement allowance
or by another method. For purposes of this subsection only, a child shall
be considered disabled if he has been determined to be eligible for
federal Social Security disability benefits or meets the dependent
disability standard established by the Department of Employee Insurance
in the Personnel Cabinet.
The other provisions of this section notwithstanding, the insurance trust
fund or accounts established pursuant to 26 U.S.C. sec. 401(h) within the
funds established in KRS 16.510, 61.515, and 78.520 shall pay a
percentage of the monthly contribution for the spouse and for each
dependent child of a recipient who was a member of the General
Assembly and is receiving a retirement allowance based on General
Assembly service, of the Kentucky Employees Retirement System and
determined to be in a hazardous position, of the County Employees
Retirement System, and determined to be in a hazardous position or of
the State Police Retirement System. The percentage of the monthly
contribution paid for the spouse and each dependent child of a recipient
who was in a hazardous position shall be based solely on the member's
service with the State Police Retirement System or service in a hazardous
position using the formula in subsection (3)(a) of this section, except that
for any recipient of a retirement allowance from the County Employees
Retirement System who was contributing to the system on January 1,
1998, for service in a hazardous position, the percentage of the monthly
contribution shall be based on the total of hazardous service and any
nonhazardous service as a police or firefighter with the same agency, if
that agency was participating in the County Employees Retirement
System but did not offer hazardous duty coverage for its police and
firefighters at the time of initial participation.
The insurance trust fund or accounts established pursuant to 26 U.S.C.
sec. 401(h) within the funds established in KRS 16.510, KRS 61.515, and
78.520 shall continue the same level of coverage for a recipient who was
a member of the County Employees Retirement System after the age of
sixty-five (65) as before the age of sixty-five (65), if the recipient is not
eligible for Medicare coverage. If the insurance trust fund or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510, 61.515, and 78.520 provides coverage for the
spouse or each dependent child of a former member of the County
Employees Retirement System, the insurance trust fund or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510, 61.515, and 78.520 shall continue the same
level of coverage for the spouse or each dependent child after the age of
(5)
(6)
(7)
(8)
sixty-five (65) as before the age of sixty-five (65), if the spouse or
dependent child is not eligible for Medicare coverage.
After July 1, 1998, notwithstanding any other provision to the contrary, a
member who holds a judicial office but did not elect to participate in the Judicial
Retirement Plan and is participating instead in the Kentucky Employees
Retirement System, the County Employees Retirement System, or the State
Police Retirement System, as provided in KRS 61.680, and who has at least
twenty (20) years of total service, one-half (1/2) of which is in a judicial office,
shall receive the same hospital and medical insurance benefits, including paid
benefits for spouse and dependents, as provided to persons retiring under the
provisions of KRS 21.427. The Administrative Office of the Courts shall pay the
cost of the medical insurance benefits provided by this subsection.
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 insurance trust fund or accounts established pursuant to 26 U.S.C. sec.
401(h) within the funds established in KRS 16.510, 61.515, and 78.520 shall
not constitute taxable income to an insured recipient. No commission shall be
paid for hospital and medical insurance procured under authority of this
section.
The board shall promulgate an administrative regulation to establish a medical
insurance reimbursement plan to provide reimbursement for hospital and
medical insurance premiums of recipients of a retirement allowance who are
not eligible for the same level of hospital and medical benefits as recipients
living in Kentucky and having the same Medicare hospital and medical
insurance eligibility status. An eligible recipient shall file proof of payment for
hospital and medical insurance at the retirement office. Reimbursement to
eligible recipients shall be made on a quarterly basis. The recipient shall be
eligible for reimbursement of substantiated medical insurance premiums for an
amount not to exceed the total monthly premium determined under subsection
(3) of this section. The plan shall not be made available if all recipients are
eligible for the same coverage as recipients living in Kentucky.
(a) 1.
For employees having a membership date on or after July 1, 2003,
and before September 1, 2008, participation in the insurance
benefits provided under this section shall not be allowed until the
employee has earned at least one hundred twenty (120) months of
service in the state-administered retirement systems.
2.
For an employee having a membership date on or after September
1, 2008, participation in the insurance benefits provided under this
section shall not be allowed until the employee has earned at least
one hundred eighty (180) months of service credited under KRS
16.543(1), 61.543(1), or 78.615(1) or another state-administered
retirement system.
(b) An employee who meets the minimum service requirements as provided
by paragraph (a) of this subsection shall be eligible for benefits as follows:
1.
For employees who are not in a hazardous position, a monthly
insurance contribution of ten dollars ($10) for each year of service
(c)
(d)
(e)
(f)
as a participating employee.
2.
For employees who are in a hazardous position or who participate in
the State Police Retirement System, a monthly insurance
contribution of fifteen dollars ($15) for each year of service as a
participating employee in a hazardous position or as a participating
member of the State Police Retirement System. Upon the death of
the retired member, the beneficiary, if the beneficiary is the
member's spouse, shall be entitled to a monthly insurance
contribution of ten dollars ($10) for each year of service the member
attained as a participating employee in a hazardous position or as a
participating member of the State Police Retirement System.
1.
The minimum service requirement to participate in benefits as
provided by paragraph (a) of this subsection shall be waived for a
member who is disabled or killed in the line of duty as defined in
KRS 16.505(19), and the member or his spouse and eligible
dependents shall be entitled to the benefits payable under this
subsection as though the member had twenty (20) years of service
in a hazardous position.
2.
The minimum service required to participate in benefits as provided
by paragraph (a) of this subsection shall be waived for a member
who is disabled in the line of duty as defined in KRS 61.621, and the
member shall be entitled to the benefits payable under this
subsection as though the member has twenty (20) years of service
in a nonhazardous position.
3.
The minimum service required to participate in benefits as provided
by paragraph (a) of this subsection shall be waived for a member
who is killed in the line of duty as described in KRS 61.621, and the
member's spouse and eligible dependents shall be entitled to the
benefits payable under this subsection as though the member has
twenty (20) years of service in a hazardous position.
The monthly insurance contribution amount shall be increased July 1 of
each year by one and one-half percent (1.5%). The increase shall be
cumulative and shall continue to accrue after the member's retirement for
as long as a monthly insurance contribution is payable to the retired
member or beneficiary.
The benefits of this subsection provided to a member whose participation
begins on or after July 1, 2003, shall not be considered as benefits
protected by the inviolable contract provisions of KRS 61.692, 16.652,
and 78.852. The General Assembly reserves the right to suspend or
reduce the benefits conferred in this subsection if in its judgment the
welfare of the Commonwealth so demands.
An employee whose membership date is on or after September 1, 2008,
who retires and is reemployed in a regular full-time position required to
participate in one (1) of the systems administered by Kentucky Retirement
Systems shall not be eligible for health insurance coverage or benefits
provided by this section and shall take coverage with his or her employing
agency during the period of reemployment in a regular full-time position.
Effective:July 1, 2013
History: Amended 2013 Ky. Acts ch. 120, sec. 71, effective July 1, 2013. -Amended 2009 Ky. Acts ch. 77, sec. 22, effective June 25, 2009. -- Amended
2008 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 24, effective June 27, 2008. -Amended 2006 Ky. Acts ch. 164, sec. 3, effective July 12, 2006. -- Amended
2004 Ky. Acts ch. 33, sec. 5, and ch. 36, sec. 30, effective July 13, 2004. -Amended 2003 Ky. Acts ch. 155, sec. 1, effective June 24, 2003. -- Amended
2001 Ky. Acts ch. 7, sec. 2, effective June 21, 2001. -- Amended 2000 Ky. Acts
ch. 341, sec. 6, effective July 14, 2000; and ch. 385, sec. 28, effective July 14,
2000. -- Amended 1998 Ky. Acts ch. 105, sec. 20, effective July 15, 1998; and
ch. 351, sec. 2, effective July 15, 1998. -- Amended 1996 Ky. Acts ch. 167,
secs. 23 and 31, effective July 15, 1996. -- Amended 1992 Ky. Acts ch. 92, sec.
1, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 489, sec. 9, effective
July 13, 1990. -- Amended 1986 Ky. Acts ch. 295, sec. 1, effective July 15,
1986. -- Amended 1982 Ky. Acts ch. 423, sec. 13, effective July 15, 1982. -Amended 1980 Ky. Acts ch. 97, sec. 4, effective July 15, 1980; and ch. 186,
sec. 17, effective July 15, 1980. -- Created 1978 Ky. Acts ch. 311, sec. 9,
effective June 17, 1978.
Legislative Research Commission Note (6/27/2008). 2008 (1st Extra. Sess.) Ky.
Acts ch. 1, sec. 43, provides "Notwithstanding any provision of KRS 61.565 or
61.702 to the contrary, the employer contribution rates for the County
Employees Retirement Systems (sic) from July 1, 2008, through June 30, 2009,
shall be 13.5 percent, consisting of 7.76 percent for pension and 5.74 percent
for insurance, for nonhazardous duty employees; and 29.5 percent, consisting of
15.04 percent for pension and 14.46 percent for insurance, for hazardous duty
employees."
Legislative Research Commission Note (6/27/2008). The Reviser of Statutes has
altered the numbering of subsection (3)(b) of this statute under the authority of
KRS 7.136(1)(c).
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