SECTION 1.

Section 19 of Chapter 32B of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by striking the third sentence of subsection (e) thereof and replacing it with the following sentence:-

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, except as set forth in subsection (j).

SECTION 2.

Section 19 of Chapter 32B of the General Laws, as appearing in the 2008 Official Edition, is hereby further amended by inserting after subsection (i) the following new subsection:-

(j) Notwithstanding any general of special law to the contrary or the transfer by a political subdivision of its subscribers to the commission under subsection (e), a political subdivision shall retain the authority provided by this chapter to contract with one or more insurance carriers for the provision of policies of supplemental health insurance to reduce the exposure of its subscribers to out-of-pocket costs related to hospital and medical expenses covered by group or blanket insurance policies.  Coverage under such supplemental health insurance policies shall be made available at the option of said subscribers and the premium for such coverage shall be paid exclusively by the subscribers, provided that the political subdivision is authorized to enter into such agreements as may be necessary with any carrier or third party administrator for the payment of such premium by means of payroll deduction and for the provision of administrative services in connection with such insurance.