SECTION 1. Section 18 of chapter 32B of the General Laws, as appearing in the 2008 Official Edition, is hereby repealed.

SECTION 2. Said chapter 32B of the General Laws, is hereby amended by striking out section 18A and inserting in place thereof the following section:-

Section 18A. (a) All retirees, their spouses and dependents insured or eligible to be insured under this chapter, if enrolled in Medicare Part A at no cost to the retiree, spouse or dependents or eligible for coverage there under at no cost to the retiree, spouse or dependents, shall be required to transfer to a Medicare health plan offered by the governmental unit under section 11C or section 16, if the benefits under the plan and Medicare Part A and Part B together shall be of comparable actuarial value to those under the retiree’s existing coverage, but a retiree or spouse who has a dependent who is not enrolled or eligible to be enrolled in Medicare Part A at no cost shall not be required to transfer to a Medicare health plan if a transfer requires the retiree or spouse to continue the existing family coverage for the dependent in a plan other than a Medicare health plan offered by the governmental unit.

(b) Each retiree shall provide the governmental unit, in such form as the governmental unit shall prescribe such information as is necessary to transfer to a Medicare health plan. If a retiree does not submit the information required, he shall no longer be eligible for his existing health coverage. The governmental unit may from time to time request from a retiree, a retiree’s spouse or a retiree’s dependent, proof, certified by the federal government, of eligibility or ineligibility for Medicare Part A and Part B coverage.

(c) The governmental unit shall pay any Medicare Part B premium penalty assessed by the federal government on the retiree, spouse or dependent as a result of enrollment in Medicare Part B at the time of transfer.

SECTION 3.  Chapter 32B is hereby amended by inserting at the end thereof the following new section:-

Section X: Notwithstanding any other provisions of this chapter, a political subdivision which transfers its subscribers to the commission under Section 19 subsection (e) may provide health reimbursement accounts to reimburse certain subscribers for qualified medical expenses. Qualified medical expenses may include, but not be limited to, out-of-pocket costs such as inpatient/outpatient copayments, calendar year deductibles, office visit copayments, and prescription drug copayments. The commission shall issue rules and regulations consistent with this section related to determining the eligibility of subscribers and the medical expenses that may be reimbursed.   

SECTION 4.  Section 2 of chapter 32B is hereby amended by inserting after subsection (j) the following subsection:-

(k) “Health Reimbursement Account”, a federally-recognized tax-exempt health benefit program that allows an employer to reimburse qualified medical expenses paid by employees.

SECTION 5.  Chapter 32B of the General Laws is hereby amended by inserting after section 20 of said chapter 32B the following section -

Section 21. (a) Notwithstanding any other provision of this chapter, the appropriate public authority of a political subdivision which has undertaken to provide health insurance coverage to its subscribers by acceptance of any other section of this chapter may elect to provide health insurance coverage to all its subscribers pursuant to this section by transferring its subscribers to the group insurance commission For the purposes of this section, the term “subscribers” shall mean employees, retirees, surviving spouses and dependents of the political subdivision and may include employees, retirees, surviving spouses and dependents of a district who previously received health insurance benefits through the political subdivision accepting this section. This section shall take effect in a political subdivision upon its acceptance in the following manner: in a county, except Worcester county, by a vote of the county commissioners; in a city having Plan D or a Plan E charter, by the manager; in any other city, by the mayor; in a town, by vote of the board of selectmen; in a regional school district, by vote of the regional district school committee; and in all other districts, by the prudential committee. The decision to transfer subscribers to the commission under this section shall not be subject to bargaining under Chapter 150E or any other subsection herein.

(b) The appropriate public authority of a political subdivision which has transferred its subscribers to the commission shall maintain existing contribution ratios, unless the appropriate public authority enters into a written agreement with the public employee unions pursuant to section 19 of chapter 32B stating otherwise. 

(c) Notwithstanding subsection (c) of section 4B of chapter 4, the decision to transfer subscribers under this section may be revoked in the same manner it was accepted in accordance with all other subsections of section 4B of said chapter 4.

(d) Nothing in this section shall relieve a political subdivision from providing health insurance coverage to an employee, retiree, surviving spouse or dependent to whom it has an obligation to provide coverage under any other provision of this chapter.

(e) Upon accepting this section, the appropriate public authority shall notify the commission that it will transfer all subscribers for whom it provides health insurance coverage to the commission. The notice shall be provided to the commission by the appropriate public authority not later than December 1 of each year and the transfer of subscribers to the commission shall take effect on the following July 1. On the effective date of the transfer, the health insurance of all subscribers, including elderly governmental retirees previously governed by section 10B of chapter 32A and retired municipal teachers previously governed by section 12 of chapter 32A, shall be provided through the commission for all purposes and governed under this section. As of the effective date and for the duration of this transfer, subscribers transferred to the commission’s health insurance coverage shall receive group health insurance benefits determined exclusively by the commission and the coverage shall not be subject to collective bargaining, except for contribution ratios which shall be determined by the written agreement in subsection (b).

Subscribers transferred to the commission who are eligible or become eligible for Medicare coverage shall transfer to Medicare coverage, as prescribed by the commission. 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. For each subscriber’s premium and the political subdivision’s share of that premium, the subscriber and the political subdivision shall furnish to the commission, in such form and content as the commission shall prescribe, all information the commission deems necessary to maintain subscribers’ and covered dependents’ health insurance coverage. The appropriate public authority of the political subdivision shall perform such administrative functions and process such information as the commission deems necessary to maintain those subscribers’ health insurance coverage including, but not limited to, family and personnel status changes, and shall report all changes monthly to the commission.

(f) To the extent authorized under chapter 32A, the commission shall provide group coverage of subscribers’ health claims incurred after transfer to the commission. The claim experience of those subscribers shall be maintained by the commission in a single pool and combined with the claim experience of all covered state employees and retirees and their covered dependents, including those subscribers who previously received coverage under sections 10B and 12 of chapter 32A.

Notwithstanding any general or special law to the contrary, a political subdivision that self-insures its group health insurance plan under section 3A and has a deficit in its claims trust fund at the time of transferring its subscribers to the commission and the deficit is attributable to a failure to accrue claims which had been incurred but not paid may capitalize the deficit and amortize the amount over 10 fiscal years in 10 equal amounts, or on a schedule providing for a more rapid amortization. Except as provided otherwise herein, subscribers eligible for health insurance coverage under subsection (e) shall be subject to all of the terms, conditions, schedule of benefits and health insurance carriers as employees and dependents as defined by section 2 and commission regulations. The commission shall determine all matters relating to subscribers’ group health insurance rights, responsibilities, costs and payments, excluding contribution ratios, and obligations, including but not limited to, the manner and method of payment, schedule of benefits, eligibility requirements and choice of health insurance carriers and these matters shall be determined exclusively by the commission and shall not be subject to collective bargaining, the written agreement under subsection (a) or to any arbitration clause under the agreement. The commission may issue rules and regulations consistent with this section and shall provide public notice of any proposed rules and regulations and notice of thereof at the request of interested parties, together with an opportunity to review those rules and regulations and an opportunity to comment on those proposed rules and regulations in writing and at a public hearing, but the commission shall not be subject to chapter 30A.

The commission shall negotiate and purchase health insurance coverage for subscribers transferred under subsection (e) and shall promulgate regulations, policies and procedures for coverage of the transferred subscribers. The schedule of benefits available to transferred subscribers shall be determined by the commission pursuant to chapter 32A. The commission shall offer those subscribers the same choice as to health insurance carriers and benefits as those provided to state employees and retirees. The political subdivision’s contribution to the cost of health insurance coverage for transferred subscribers shall be as determined under the written agreement entered into pursuant to this section, and shall not be subject to the provisions on contributions in said chapter 32A. Any change to the premium contribution ratios shall become effective on July 1 of each year, with notice to the commission of such change not later than January 15 of the same year.

A political subdivision that transfers subscribers to the commission shall pay the commission for all costs of its subscribers’ coverage, including administrative expenses, and the governmental unit’s cost of subscribers’ premium. The commission shall determine on a periodic basis the amount of premium which the political subdivision shall pay to the commission. If the political subdivision unit fails to pay all or a portion of these costs according to the timetable determined by the commission, the commission may inform the state treasurer who shall issue a warrant in the manner provided by section 20 of chapter 59 requiring the respective political subdivision to pay into the treasury of the commonwealth as prescribed by the commission the amount of the premium and administrative expenses attributable to the political subdivision. The state treasurer shall recoup any past due costs from the political subdivision’s cherry sheet under section 20A of chapter 58 and transfer that money to the commission. If a governmental unit fails to pay to the commission the costs of coverage for more than 90 days and the cherry sheet provides an inadequate source of payment, the commission may, at its discretion, cancel the coverage of subscribers of the political subdivision. If the cancellation of coverage is for nonpayment, the political subdivision shall provide all subscribers health insurance coverage under plans which are the actuarial equivalent of plans offered by the commission in the preceding year until there is an agreement with the public employee committee providing for replacement coverage.

The commission may charge the political subdivision an administrative fee, which shall not be more than 1 per cent of the cost of total premiums for the political subdivision, to be determined by the commission which shall be considered as part of the cost of coverage for purposes of determining the contributions of the political subdivision and its employees to the cost of health insurance coverage by the commission.

(g) Any political subdivision that elects to transfer its subscribers to the commission shall establish a contribution to the premium or cost of health insurance coverage that provides for at least 50 per cent but not more than 99 per cent, except that, the contribution to the premium or cost of health insurance coverage provided by a health maintenance organization shall not be more than 90 per cent. Notwithstanding this subsection, subscribers whose coverage was governed by section 10B or 12 of chapter 32A before the date that the decision to transfer subscribers was made, shall not be required to contribute more than 25 per cent of their health insurance premiums, but the political subdivision may provide for a premium contribution paid by these subscribers of less than 25 per cent.

(h) In the absence of a public collective bargaining unit, the chief executive officer of a municipality may authorize the transfer of subscribers to the commission and determine any and all contribution ratios for its subscribers.

Section 6. Chapter 32B of the General Laws is hereby further amended by inserting after section 21 the following section -

Section 22. (a) Notwithstanding any other provision of this chapter, the appropriate public authority of a municipality which has undertaken to provide health insurance coverage to its subscribers by acceptance of any other section of this chapter may elect to provide health insurance coverage to all its subscribers pursuant to this section by entering into contracts with health insurance carriers under subsection (b). For the purposes of this section, the term “subscribers” shall mean employees, retirees, surviving spouses and dependents of the municipality and may include employees, retirees, surviving spouses and dependents of a district who previously received health insurance benefits through the municipality accepting this section. This section shall take effect in a municipality upon its acceptance by its appropriate public authority in the following manner: in a city having Plan D or a Plan E charter, with approval by the manager; in any other city, with approval by the mayor; and in a town, by vote of the board of selectmen. The decision to accept this section shall not be subject to bargaining pursuant to chapter 150E or section 19 or chapter 32B.

(b) A municipality is authorized to provide to its subscribers health insurance plans with an actuarial value that is equal to, but no lesser than, the actuarial value of the health insurance plans provided in any of the same class of health insurance plans purchased under authority of section 4 of chapter 32A and made available to persons in the service of the commonwealth pursuant to section 5 of such chapter. For purposes of this section, a “Point of Service” plan offered by a municipality shall be considered to fall within the PPO class. The appropriate public authority shall have the authority to achieve the authorized actuarial value by adjusting co-payments, deductibles and tiered provider network co-payments or other plan design features without bargaining pursuant to chapter 150E or section 19 or chapter 32B. 

For purposes of this section, the actuarial value of such health insurance plans shall be determined by the secretary of administration and finance and shall be determined by reference to the health insurance plan purchased pursuant to section 4 of chapter 32A with the largest subscriber enrollment and by using the applicable standards of practice established by the American Academy of Actuaries in issuing an actuarial opinion. The authorized actuarial value for health insurance plans shall be adjusted whenever the group insurance commission adjusts the co-payments, deductibles, tiered provider network copayments or other plan design features of any of the health insurance plans purchased under its authority of section 4 of chapter 32A. For purposes of this section, actuarial value shall mean the measure of medical expenses estimated to be paid in a certain health insurance plan for a standard population.

Nothing herein shall prohibit a municipality from providing health insurance plans with an actuarial value that is lesser than those authorized in this section. Such health insurance plans may be offered only after the appropriate public authority has satisfied any bargaining obligations pursuant to chapter 150E.

SECTION 7.  Notwithstanding any special or general law to the contrary, changes made to health insurance benefits under sections 21 or 22 of Chapter 32B for any group of employees covered by a collective bargaining agreement in effect as of July 1, 2011 shall not be inconsistent with the provisions of such agreement.