Bill HD.4151

HOUSE DOCKET, NO. 4151 FILED ON: 9/10/2015

HOUSE . . . . . . . . . . . . . . . No.

By Mr. Lyons of Andover, a petition (subject to Joint Rule 12) of James J. Lyons, Jr. and Frank A. Moran for legislation to further regulate retiree healthcare benefits. Public Service.

The Commonwealth of Massachusetts

_______________

In the One Hundred and Eighty-Ninth General Court
(2015-2016)

_______________

An Act providing retiree healthcare benefits reform.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 2 of chapter 32A of the General Laws, as amended by section 34 of

chapter 224 of the acts of 2012, is hereby further amended by adding the following subsection:-

(j) “Qualified retiree,” a person who was an employee after January 1, 1956, is receiving

a retirement allowance from a system, as defined in section 1 of chapter 32 and who is eligible

for contributions to group health care coverage under this chapter, including retirees receiving a

retirement allowance from the optional retirement plans of participating retirees under section 40

of chapter 15A, but excluding retirees receiving a retirement allowance from any plan designed

specifically to comply with the federal Omnibus Budget Reconciliation Act of 1990 (P.L. 101-

508), as amended.

(1) An individual who receives a superannuation retirement from a position classified as

Group 1 under section 3 of chapter 32 shall not be a qualified retiree unless the individual is at

least 60 years old. An individual who receives a superannuation retirement from a position

classified as Group 2 under section 3 of chapter 32 shall not be a qualified retiree unless the

individual is at least 55 years old. An individual who receives a superannuation retirement from a

position classified as Group 3 under section 3 of chapter 32 shall not be a qualified retiree unless

the individual is at least 50 years old. An individual who receives a superannuation retirement

from a position classified as Group 4 under section 3 of chapter 32 shall not be a qualified retiree

unless the individual is at least 50 years old. In addition, a retired employee shall not be a

qualified retiree for purposes of this chapter unless the retired employee has received a minimum

of 20 years of creditable service.

(2) A retired employee shall not be considered a qualified retiree unless the individual

was employed by the public employer at the time of retirement, but this requirement shall not

apply to retired employees with at least 25 years of creditable service if they apply for retirement

within 5 years after leaving public employment or to retired employees with at least 20 years of

creditable service if they are enrolled in Medicare parts A and B.

(3) The requirements of subparagraphs (1) and (2) of this definition shall not apply to (a)

individuals who retired before July 1, 2013; (b) employees and former employees who, on July

1, 2013, are within 5 years of eligibility for superannuation retirement under chapter 32 and have

received a minimum of 20 years of creditable service; (c) employees and former employees

who, on July 1, 2013, are within 5 years of eligibility for Medicare and have received a minimum

of 9 years of creditable service; (d) individuals who are members of the teachers retirement

system or the State-Boston retirement system who participate in the alternative superannuation

retirement benefit program established under subsection 4 of section 5 of chapter 32 and are at

least 57 years old and eligible for a retirement benefit of 80 per cent; (e) individuals receiving an

accidental disability retirement under section 7 of chapter 32; or (f) individuals receiving an

ordinary disability retirement under section 6 until access to healthcare benefits though a Health

Insurance Exchange becomes available to qualified individuals under the Patient Protection and

Affordable Care Act, Public Law 111-148. Individuals in these categories, upon retirement,

shall be considered qualified employees for purposes of this chapter.

SECTION 2. Section 8 of said chapter 32A, as appearing in the 2010 Official Edition, is

hereby amended by striking out the first paragraph and inserting in place thereof the following 4

paragraphs:-

For policies of group life insurance and accidental death and dismemberment insurance,

and group health insurance purchased by the commission in accordance with sections 4, 5 and

10C, the commonwealth, on behalf of active employees and their dependents shall contribute not

less than 75 per cent of the total monthly premium or rate applicable to said coverages.

For policies of group life insurance and accidental death and dismemberment insurance,

and group health insurance purchased by the commission in accordance with sections 4, 5 and

10C, the commonwealth, on behalf of qualified retirees and their dependents, shall contribute not

less than 50 per cent of the total monthly premium or rate applicable to said coverages and the

qualified retirees on behalf of themselves or themselves and their dependents shall contribute the

remaining 50 per cent of the total monthly premium or rate. For purposes of this section,

“maximum available benefit” shall mean the percentage of the total monthly premium or rate

paid by the commonwealth to qualified retirees with a minimum of 30 years of creditable

service. The commonwealth shall contribute an increased amount of the total monthly premium

or applicable rate according to the following schedule:

(a) Qualified retirees with a minimum of 20 years of creditable service shall be eligible to

receive a minimum of 50 per cent of the total monthly premium or applicable rate.

(b) Qualified retirees with a minimum of 23 years of creditable service shall be eligible to

receive a minimum of 50 per cent of the total monthly premium or applicable rate, plus 1/3 of the

difference between 50 per cent and the maximum available benefit.

receive a minimum of 50 per cent of the total monthly premium or applicable rate, plus 2/3 of the

difference between 50 per cent and the maximum available benefit.

(d) Individuals receiving an ordinary disability retirement under section 6 of chapter 32

who have received a minimum of 10 years of creditable service shall be eligible to receive a

minimum of 50 per cent of the total monthly premium or applicable rate.

(e) Notwithstanding clauses (a) through (d), qualified retirees who are not subject to the

requirements of subparagraphs (1) and (2) of subsection section (j) of section 2 shall be eligible

to receive the maximum available benefit.

An employee who retires after July 1, 2013 and is not a qualified retiree shall be eligible

to receive 50 per cent of the total monthly premium or applicable rate if, by July 1, 2013, the

employee: (i) is at least 50 years old and has completed 15 years of creditable service, or (ii) is at

least 55 years old and has completed at least 10 years of creditable service.

The active and retired employees on behalf of themselves or themselves and their

dependents shall contribute the remaining share of the total monthly premium or rate, except,

that upon approval by way of an annual, or more frequent appropriation act, the commonwealth

may contribute more than the percentage indicated above, but less than the entire total monthly

premium or rate. Each appropriation act as may be applicable, shall provide the necessary sum

based upon the estimated monthly cost as required by section 4 and shall describe the ratio of

contribution to be paid by the commonwealth and by the active and retired employees insured

under the aforesaid sections. The description of the ratio may include a condition that if, as a

result of a change in the total monthly premium or rate which occurs during the current or

ensuing fiscal year from a change in a contract between the commission and the insurance carrier

or carriers, the amount of the contribution paid by the active and retired employee and

dependents is to remain unchanged and the difference in the amount thus paid and the total

monthly premium or rate as changed is to be added to, or deducted from as the case may be, the

contribution by the commonwealth. This ratio shall continue until changed by a subsequent

appropriation act, and the aforesaid sum shall also include the commonwealth’s contribution of

the total monthly premium or rate required for coverages contained in other sections of this

chapter.

SECTION 3. The second paragraph of said section 8 of said chapter 32A, as so

appearing, is hereby amended by striking out the second sentence and inserting in place thereof

the following sentence:- With respect to any period of insurance authorized by this chapter which

is in effect for a qualified retiree and dependent, there shall be withheld from each payment of

pension or retirement allowance not more than 50 per cent of the aforesaid total monthly

premium, or there shall be withheld a lesser amount as provided in this section and the most

recent applicable appropriation act.

SECTION 4. The first paragraph of section 10 of said chapter 32A, as so appearing, is

hereby amended by adding the following sentence:- A retiree who is not a qualified retiree may

continue all such insurance coverage if the retiree files an application to the commission on a

form prescribed by the rules and regulations of the commission, and makes payment to the

commission for the total monthly premium or rate applicable to the coverage in such manner as

the commission may prescribe.

SECTION 5. Section 10C of said chapter 32A, as so appearing, is hereby amended by

striking out, in lines 69 to 71, the words “fifty per cent of the premium for such insurance, and

the commonwealth shall make primary payment of the remaining fifty per cent” and inserting in

place thereof the following words:- the appropriate per cent of the premium for such insurance,

and the commonwealth shall make primary payment of the remaining share.

SECTION 6. Section 11 of said chapter 32A, as so appearing, is hereby amended by

striking out, in lines 13 to 14, the words “contributes, pursuant to section eight, on behalf of

retired employees,” and inserting in place thereof the following words:- had contributed on

behalf of the deceased employee or retiree as of the date of death, but for the surviving spouse of

an employee or retired employee who died before July 1, 2013, the commonwealth shall

contribute 90 per cent of the cost of the monthly premium or rate applicable to the coverage.

Contributions by the commonwealth under this section shall be.

SECTION 7. Section 12 of said chapter 32A, as so appearing, is hereby amended by

inserting, after the first paragraph, the following paragraph:-

Notwithstanding the first paragraph of this section, for retired teachers who are qualified

retirees as defined in section 2 of chapter 32B, the commission shall determine a schedule of

contribution ratios consistent with section 5 of chapter 32B. Notwithstanding the first paragraph

of this section, a retired teacher who is not a qualified retiree as defined in section 2 of chapter

32B may continue all insurance coverage to which the retiree is entitled under this section if the

retiree files an application therefor with the commission, and makes payment for the total

monthly premium or rate applicable to the coverage to the commission in such manner as it may

prescribe.

SECTION 8. Section 2 of chapter 32B of the General Laws, as amended by section 1 of

chapter 69 of the acts of 2011, is hereby further amended by inserting after the definition of

“political subdivision” the following definition:-

“Qualified retiree,” a retired employee who is eligible for contributions to group health

care coverage under this chapter.

(1) An individual who receives a superannuation retirement from a position classified as

Group 1 under section 3 of chapter 32 shall not be a qualified retiree unless the individual is at

least 60 years old. An individual who receives a superannuation retirement from a position

classified as Group 2 under section 3 of chapter 32 shall not be a qualified retiree unless the

individual is at least 55 years old. An individual who receives a superannuation retirement from

a position classified as Group 4 under section 3 of chapter 32 shall not be a qualified retiree

unless the individual is at least 50 years old. In addition, a retired employee shall not be a

qualified retiree for purposes of this chapter unless the retired employee has received a minimum

of 20 years of creditable service.

(2) A retired employee shall not be considered a qualified retiree unless the individual

was employed by the employer at the time of retirement, but this requirement shall not apply to

retired employees with at least 25 years of creditable service if they apply for retirement within 5

years after leaving public employment or to retired employees with at least 20 years of creditable

service if they are enrolled in Medicare parts A and B.