Bill Number: S.B. 1045
Livingston
Floor Amendment
Reference
to: printed bill
Amendment
drafted by: Leg Council
FLOOR
AMENDMENT EXPLANATION
1. Requires the Public
Safety Personnel Retirement System Board of Trustees (PSPRS Board) to
establish, design and administer a group health benefits plan to provide
statutorily prescribed group health benefits for retired participants who make
an election to participate.
2. Deems a retired PSPRS
member who participates in the defined contribution plan (DC Plan) and who
makes an election to participate in the group health benefits plan as eligible
for group health benefits.
3. Requires an existing
PSPRS DC Plan participant, for 90 days after July 1, 2022, to have the
opportunity to participate in the group health benefits plan by opting in
through an irrevocable election to pay the required costs through payroll
deduction.
4. Allows a PSPRS DC Plan
participant who is hired after July 1, 2022, to participate in the group health
benefits plan by making an irrevocable election to pay the required costs
through payroll deduction.
5. Requires an existing
PSPRS DC Plan participant, if the participant fails to make an irrevocable
election within the 90-day period, to be excluded from receiving any group health
benefits plan benefits during retirement.
6. Prohibits an existing
PSPRS DC Plan participant who fails to make an irrevocable election within the
90-day period from again having an election to participate if the participant
is reemployed in a position that allows participation in the DC Plan.
7. Requires the group
health benefits plan to provide payments in statutorily outlined amounts to a
Tier 3 retired PSPRS member or a retired CORP member a retired participant who
has elected to participate, if the retired participant:
a) meets requirements for
the normal retirement date; and
b) has elected to:
i. participate in the
group health and accident coverage or any other retiree health and accident
insurance coverage provided by a participating employer; or
ii. purchases individual
health care coverage and receives a payment through the retired participant's
former employer if the employer assumes the administrative functions associated
with the payment.
8. Requires monies
collected from employee and employer contributions to the group health benefits
plan to be deposited in a separate account solely to pay for group health
benefits and the amounts must be held in trust for the purpose of providing
group health benefits.
9. Requires the PSPRS
Board to subject the separate account to actuarial analysis and to manage the
account in an actuarily sound manner.
10. Deems contributions made to the separate
account nonrefundable and as separate assets for the purposes of funding the
group health benefits plan.
11. Requires any remaining assets, if the
PSPRS Board dissolves the separate account trust, to be returned to the
contributing employers in amounts determined by the PSPRS Board.
12. Requires each employer and each PSPRS DC
plan participant who makes an election to participate in the group health
benefits plan to pay an equal amount for costs, as actuarially determined, for
the group health benefits plan.
13. Requires each employer to transfer the
employer and participant contributions to the PSPRS Board within 10 working
days after each payroll date and requires contributions made after the deadline
to include a penalty to be paid by the employer of 10 percent per year,
compounded annually, for each day the contributions are late.
14. Allows delinquent contribution payments
and interested charges to be recovered by a court action against an employer or
may be deducted from any other monies payable to such an employer by a
department or agency at the request of the PSPRS Board.
15. Allows the PSPRS Board to authorize
PSPRS to:
a) administer the group health
benefits plan;
b) pay costs from the
separate account to PSPRS for administrative expenses; and
c)
allocate
costs on a pro rata basis consistent with the required employer and employee
contributions.
16. Declares the Legislature's intention
that the group health benefits plan for participants constitutes the exercise
by the PSPRS Board of an essential governmental function and that the separate
account is exempt from federal and state income tax.
17. Allows the PSPRS Board to adopt any
additional provisions to the group health benefits plan that is necessary to
fulfill the Legislature's intent.
18. Declares the purpose of the group health
benefits plan statute as providing a group health benefits plan that is fully
funded on a current basis from employer and participant contributions.
19. Removes the application
of all prescribed restrictions related to the amount of group health and
accident coverage on a Tier 3 retired participant of the PSPRS DC Plan and a
retired CORP member who participates in the PSPRS DC Plan and make an election.
20. Makes technical and conforming changes.
21. Delays enactment of the provisions
relating to the group health benefits plan to July 1, 2022.
Page 4, line
29, after "section" strike remainder of line
Line 30,
strike "selected" insert ", but shall pay
the premium for the coverage selected."
Line 31,
after "38-857" insert "a retired participant that makes an election pursuant to section 38-869
may be eligible for group health benefits as specified in section 38-869"
Page 6,
strike lines 34 through 45
Strike page
7
Page 8,
strike lines 1 through 36
Renumber to
conform
Page 10,
line 9, after "2." insert "For
participants who make an election pursuant to section 38-869,";
strike "and accident coverage"
Strike line
10
Line 11,
strike "38-906, subsections A and B, as applicable,"
insert "benefits plan payments as specified in section 38-869"
Line 12,
after the second "board" insert ", which shall be deposited in a separate account established pursuant
to section 38-869"
Strike lines
35 through 45
Strike pages
11 and 12, insert:
"Sec. 4. Title
38, chapter 5, article 4.1, Arizona Revised Statutes, is amended by adding
section 38-869, to read:
START_STATUTE38-869. Group
health benefits plan; retired participants; definition
A. The
board shall establish, design and administer a group health benefits plan to
provide group health benefits as prescribed in sections 38-857 and 38-906
for retired participants who make an election pursuant to this section. Monies
collected pursuant to section 38-867, subsection G, paragraph 2 shall be
deposited in a separate account solely to pay for group health benefits
provided under this section and the amounts shall be held by the board in trust
for the purpose of providing the group health benefits.
B.
The purpose of this section is to provide a group health benefits plan that is
fully funded on a current basis from employer and participant contributions.
The board shall subject the account to actuarial analysis and manage the
account in an actuarially sound manner.
C.
Contributions made to the account are nonrefundable and are separate assets for
the purposes of funding the group health benefits plan.
D.
The legislature intends that the group health benefits plan for participants
constitutes the exercise by the board of an essential governmental function as
provided in section 115(1) of the internal revenue code, as amended, or
successor provisions of law and that the trust created pursuant to this section
is exempt from federal and state income tax. Notwithstanding
subsection A of this section, If the board dissolves the trust created pursuant
to this section, any remaining assets shall be returned to the employers that
have contributed to the trust in such amounts as the board determines. The
board may adopt any additional provisions to the group health benefits plan
that is necessary to fulfill this intent.
E.
For ninety days after the effective date of this section, existing participants
shall have the opportunity to participate in the group health benefits plan by
opting in through an irrevocable election to pay the required costs of the group
health benefits plan through payroll deduction. For ninety days after
employment, participants who are hired after the effective date of this section
may participate in the group health benefits plan by making an irrevocable
election to pay the required costs of the group health benefits plan through
payroll deduction. If a participant fails to make an irrevocable election
within the ninety-day period specified in this subsection, the
participant shall be excluded from receiving any benefits specified in this
section during the participant's retirement and may not again have an election
to participate if the participant is ever reemployed in a position in which the
participant may again participate in the defined contribution plan.
F.
Each participant who makes an election pursuant to subsection E of this section
and the participant's employer shall pay an equal amount for costs, as
actuarially determined, for the group health benefits plan pursuant to section
38-867.
G.
Each employer shall transfer to the board the employer and participant
contributions paid pursuant to section 38-867, subsection G, paragraph 2
within ten working days after each payroll date. Contributions transferred
after that date shall include a penalty to be paid by the employer of ten
percent per year, compounded annually, for each day the contributions are late.
Delinquent payments due under this subsection, together with interest charges
as provided in this subsection, may be recovered by an action in a court of
competent jurisdiction against an employer that is liable for the payments or,
at the request of the board, may be deducted from any other monies, including
excise revenue taxes, payable to such an employer by any department or agency
of this state.
H.
Notwithstanding any other law, the board may authorize the system to administer
the group health benefits plan, to pay costs from the account to the system for
administrative expenses and to allocate costs on a pro rata basis consistent
with subsection F of this section.
I. The
group health benefit plan established pursuant to this section shall provide a
retired participant who has made an election pursuant to this section payments
prescribed in section 38-857, subsection A or B, or section 38-906,
subsection A or B, as applicable, if the retired participant both:
1. Meets
the requirements of the normal retirement date as defined in section 38-842,
paragraph 32, subdivision (c) or section 38-881, paragraph 28, subdivision (c), as applicable.
2. Has
elected either:
(a) To participate
in the group health and accident coverage provided by section 38-651.01
or 38-782 or any other retiree health and accident insurance coverage
provided or administered by a participating employer.
(b) To
purchase individual health care coverage and receive a payment pursuant to this
section through the retired participant's former employer if that former
employer assumes the administrative functions associated with the payment,
including verification that the payment is used to pay for health insurance
coverage if the payment is made to the retired participant.
J. For
the purposes of this section, "participant" means a participant as
defined in section 38-865, paragraph 7, subdivision (a), item (i) and subdivision (b).END_STATUTE
Sec. 5. Effective date
Sections
38-651.01 and 38-867, Arizona Revised Statutes, as amended by this act, and
section 38-869, Arizona Revised Statutes, as added by this act, are effective
from and after June 30, 2022."
Amend title to conform