SECTION 1.  Chapter 32B of the General Laws, as so appearing in the 2008 Official Edition, is hereby amended by adding at the end thereof the following new section:

Section 21.  (a) Effective July 1, 2011, a governmental unit shall include, as part of the group general or blanket insurance providing hospital, surgical, chiropractic, medical, dental and other health insurance, hereinafter a “health benefit plan” that it offers to its employees and retirees, design features that are either a) less costly on a per member per month basis or b) the actuarial equivalent of health plans offered by the Group Insurance Commission pursuant to Chapter 32A, which plans shall be offered without bargaining pursuant to either Chapter 150E or Section 19 of Chapter 32B.  For purposes of this section, a “Point of Service” plan offered by a governmental unit shall be considered to fall within the PPO class.

Nothing herein shall prohibit a governmental unit from including in its health benefit plan higher co-payments, deductibles co-insurance or other plan design features different than those authorized by the preceding paragraphs of this section; but such higher co-payments, deductibles or co-insurance or other plan design features may be included only after the governmental unit has satisfied any bargaining obligations pursuant to either Chapter 150E or Section 19 of Chapter 32B.

(b) Employees or retirees who are eligible or become eligible for Medicare coverage shall transfer to Medicare coverage.  In the event of transfer to Medicare, the political subdivision shall pay any Medicare part B premium penalty assessed by the federal government on retirees, spouses and dependents as a result of enrollment in Medicare part B at the time of transfer into the Medicare health benefits supplement plan.