Section 16-25A-8

Funding of health insurance plan; report to Legislature; payment of costs by employees; dependent coverage; fund created; custodian; deposits; payment of premiums into fund.

THIS SECTION WAS AMENDED IN THE 2003 SECOND SPECIAL SESSION, EFFECTIVE OCTOBER 1, 2003. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.

(a) The Public Education Employees' Health Insurance Board is hereby authorized to provide under the contract, contracts, or other arrangements entered into under the provisions of this chapter an insurance benefit plan for each covered employee and, under certain conditions, retired employees; the cost of such plan may be funded in part or in full through monthly premiums per active employee from the same source of funds as those used for the payment of salaries of active members and in part from other funds;

(b) On or before January 1 next preceding each regular meeting of the Legislature, the board shall certify to the Governor and to the Legislature the amount or amounts necessary to fund coverage for benefits authorized by this chapter for the following fiscal year for employees and for retired employees as a monthly premium per active member per month. The Legislature shall set the premium rate in the annual appropriation bill.

(c) Any eligible retired employee may elect to participate in the plan authorized by this chapter provided that such retired employee shall agree to have withheld from each monthly retirement payment an amount equal to the entire cost of such coverage; provided, however, that such amount withheld shall be reduced to the extent of any amount which is included in the active employee rate for that purpose. For those retired employees eligible for the federal Medicare program the aforesaid amount to be withheld shall be an amount equal to the cost of such insurance benefit plan for coverage of a retired employee eligible to receive benefits under the federal Medicare program. For those retired employees not eligible for the federal Medicare program such amount to be withheld and coverage provided shall be equal to the cost of such insurance benefit plan for employees.

(d) For any fiscal year in which the monthly premium certified under subsection (a) for hospital/medical insurance per eligible employee is less than the cost of said coverage per eligible employee, then the difference in cost per eligible employee shall be submitted for each eligible employee by the employing board, institution or agency monthly to the board, the sum of which may be any combination of employee funds collected through monthly payroll deduction and employing board, institution or agency funds; in any fiscal year in which the monthly premium for hospital/medical insurance for retired employees is less than the cost of said coverage, then the difference in cost per eligible retired employee as defined in subsection (c) shall be withheld from the monthly retirement check of said retired employee.

(e) Each employee and retired employee shall be entitled to have his spouse and dependent children, as defined by the rules and regulations of the board, included in the coverage provided upon agreeing to pay the costs of such coverage for such dependents. The board shall adopt regulations governing the discontinuance and resumption by such employees of coverage for dependents, and in the event of the death of an employee or retired employee, provisions whereby their spouse and dependents may elect to continue that coverage; provided, however, that the spouse and dependents shall pay the full cost of their coverage. During any period in which an employee's or retired employee's dependents are covered under this chapter, there shall be withheld from the salary payment of such employee or the monthly retirement allowance of such retired employee, the entire premium cost for coverage of such dependents under the terms of any contract, contracts, or arrangement entered into in accordance with the provisions of this chapter;

(f) There is hereby created in the State Treasury a fund to be known as the Public Education Employees' Health Insurance Fund. Such fund shall consist of and there shall be deposited into such fund all employer paid premiums under the provisions of subsection (b) of this section and all premiums paid by employees and retired employees under the provisions of this section and any other premiums paid under the provisions of this chapter. The board shall designate a custodian of this fund who shall be authorized to make deposits into and payments therefrom in accordance with contracts entered into by said board; in addition, any income arising from the investment or deposit of the assets of said fund shall accrue solely to the benefit of said fund.

(g) Any state appropriation from the Education Trust Fund for the fiscal year ending September 30, 1984, and any subsequent fiscal year employer premium payments for hospital/medical insurance for eligible employees as defined under the provisions of this chapter which are made by any institution, board or agency whether heretofore or hereafter made, shall be deposited in the fund created in subsection (f) of this section and shall be used to fund coverage for the benefits authorized by the provisions of this chapter. Disbursement of such funds shall be in accordance with the provisions of subsection (b) of this section.

(h) Premiums required to be paid by the employer together with any premiums deducted from employees' compensation shall be paid to the Public Education Employees' Health Insurance Fund on the first day of the month for which coverage is applicable and the first day of each month thereafter. Monthly reports of the coverage type and premium amount for each covered employee shall be submitted in a format prescribed by the Public Education Employees' Health Insurance Fund.

(i) Each university which has not elected to participate in the Public Education Employees' Health Insurance Plan shall pay the cost of insuring each employee retired from such university who elects to participate under the Public Education Employee Health Insurance Plan. Such costs shall be determined in the same manner as is determined for all other retired employees by using the previous fiscal year's claims for all retired employees increased by the expected claims trend for the current fiscal year, as provided by the Public Education Employees' Health Insurance Board's claims administrator. Such amount shall be reduced by the premiums to be paid by the retired employees during the current fiscal year. The Public Education Employees' Health Insurance Board shall invoice each university monthly, and the university shall pay the board within 30 days of the date of the date of the invoice. If payment is not made within 30 days, the Department of Finance is hereby authorized to pay the amount due to the Public Education Employees' Health Insurance Fund directly from funds appropriated to the university.

(Acts 1983, No. 83-455, p. 640, §8; Acts 1995, No. 95-538, p. 1100, §12; Act 2003-473, 2nd Sp. Sess., §1.)