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The 192nd General Court of the Commonwealth of Massachusetts

Section 8A: Dividends and refunds; deposit in employees' group insurance trust fund; administrative costs; effective date

Section 8A. In any governmental unit which accepts the provisions of this section, all dividends, their equivalent and other such refunds accepted by the governmental unit from the carrier or carriers as a result of any policy or policies entered into under the authority of this chapter shall be deposited by the treasurer thereof in a separate fund to be known as the employees' group insurance trust fund.

Prior to the distribution of all such dividends or refunds, the appropriate public authority shall determine the total administrative cost of all policies of insurance entered into under authority of this chapter for the calendar year preceding the date of receipt of the dividend, and shall notify the treasurer to transfer the amount of said total administrative cost from the said trust fund to the appropriate general revenue accounts of the governmental unit.

If the said total administrative cost exceeds the dividend receipts, the entire dividend shall be so transferred; if the dividend receipts exceed the said total administrative cost, the appropriate public authority shall notify the treasurer to transfer to the appropriate revenue accounts that portion of the remaining balance which represents the governmental units' proportionate share of the premium cost of the policy year to which the dividend or refund is attributable. The balance of said dividend remaining in the trust fund shall represent the employees' and retirees' proportionate share of the premium cost. The appropriate public authority at a date deemed practicable shall then authorize the treasurer to expend the remaining balance of the trust fund on behalf of the insured employees and retired employees to reduce the insured employees' and retired employees' share of future premium costs or by a proportionate refund to insured members. The reduction of such costs shall be determined by using the ratio of the dividends received to the insured employees' and retired employees' share of the total premiums which yielded the dividend.

In the event two or more governmental units are participating in accordance with section eleven, all dividends or their equivalent or other such refunds shall first be allocated to the respective governmental units in proportion to the gross premiums paid by each governmental unit to the respective carrier or carriers.

This section shall take effect in a county, except Worcester county, city, town or district upon its acceptance in the following manner:—In a county by vote of the county commissioners; in a city having a Plan D or Plan E charter by majority vote of its city council; in any other city by vote of its city council, approved by the mayor; in a district by vote of the district at a district meeting; and in a town if a majority of the votes cast in answer to the following question, which shall be printed on the official ballot to be used at an election in said town, is in the affirmative:—''Shall the town distribute to its insured employees, after deducting the town's total administrative cost, the balance of any group insurance dividend which shall be based upon the employees' proportionate share of the total premiums paid for all insurance coverages?''

Section eight shall not apply in any governmental unit which accepts the provisions of this section.