61.702 Group hospital and medical insurance plan -- Inclusion in Kentucky
4,284 words·~19 min read·
/ky/61-702A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Employees Health Plan -- Employee and employer contributions -- Minimum
service requirements -- Members with service in other retirement systems --
Exemption from premium tax -- Administrative regulation.
(1)For purposes of this section:
(a)"Hospital and medical insurance plan" may include, at the board's discretion,
any one
(1)or more of the following:
1. Any hospital and medical expense policy or certificate, provider-
sponsored integrated health delivery network, self-insured medical plan,
health maintenance organization contract, or other health benefit plan;
2. Any health savings account as permitted by 26 U.S.C. sec. 223 or health
reimbursement arrangement or a similar account as may be permitted by
26 U.S.C. sec. 105 or 106. Such arrangement or account, at the board's
discretion, may reimburse any medical expense permissible under 26
U.S.C. sec. 213; or
3. A medical insurance reimbursement program established by the board
through the promulgation of administrative regulation under which
members purchase individual health insurance coverage through a health
insurance exchange established under 42 U.S.C. sec. 18031 or 18041;
(b)"Monthly contribution rate" is the amount determined by the board based
upon the requirements of subsection (4)(a) to
(d)of this section, except that
for members who began participating in the system on or after July 1, 2003,
the term shall mean the amount determined in subsection (4)(e) of this
section; and
(c)"Months of service" means the total months of combined service used to
determine benefits under the system, except service added to determine
disability benefits or service otherwise prohibited from being used to
determine retiree health benefits under KRS 16.505 to 16.652 or 61.510 to
61.705 shall not be counted as "months of service." For current and former
employees of the Council on Postsecondary Education who were employed
prior to January 1, 1993, and who earn at least fifteen
(15)years of service
credit in the Kentucky Employees Retirement System, "months of service"
shall also include vested service in another retirement system other than the
Kentucky Teachers' Retirement System sponsored by the Council on
Postsecondary Education.
(a)1. The board of trustees of the system shall arrange by appropriate contract
or on a self-insured basis to provide a group hospital and medical
insurance plan coverage for:
a. Present and future recipients of a retirement allowance from the
Kentucky Employees Retirement System and the State Police
Retirement System; and
b. The spouse and each qualified dependent of a recipient who is a
former member or the beneficiary, provided the spouse and
dependent meet the requirements to participate in the hospital and
medical insurance plans established, contracted, or authorized by
the system.
2. Any recipient who chooses coverage under a hospital and medical
insurance plan shall pay, by payroll deduction from the retirement
allowance, electronic funds transfer, or by another method, the
difference between the premium cost of the hospital and medical
insurance plan coverage selected and the monthly contribution rate to
which he or she would be entitled under this section.
(b)1. For present and future recipients of a retirement allowance from the
system who are not eligible for Medicare and for those recipients
described in subparagraph 3.b. of this paragraph, the board may
authorize these participants to be included in the Kentucky Employees
Health Plan as provided by KRS 18A.225 to 18A.2287 and shall provide
benefits for recipients in the plan equal to those provided to state
employees having the same Medicare hospital and medical insurance
eligibility status. Notwithstanding the provisions of any other statute
except subparagraph 3.b. of this paragraph, system recipients shall be
included in the same class as current state employees for purposes of
determining medical insurance policies and premiums in the Kentucky
Employees Health Plan as provided by KRS 18A.225 to 18A.2287.
2. Regardless of age, if a recipient or the spouse or dependent child of a
recipient who elects coverage becomes eligible for Medicare, he or she
shall participate in the plans offered by the systems for Medicare
eligible recipients. Individuals participating in the Medicare eligible
plans may be required to obtain and pay for Medicare Part A and Part B
coverage, in order to participate in the Medicare eligible plans offered
by the system.
3. The system shall continue to provide the same hospital and medical
insurance plan coverage for recipients and qualifying dependents after
the age of sixty-five
(65)as before the age of sixty-five (65), if:
a. The recipient is not eligible for Medicare coverage; or
b. The recipient would otherwise be eligible for Medicare coverage
but is subject to the Medicare Secondary Payer Act under 42
U.S.C. sec. 1395y(b) and has been reemployed by a participating
agency which offers the recipient a hospital and medical insurance
benefit or by a participating agency which is prevented from
offering a hospital and medical benefit to the recipient as a
condition of reemployment under KRS 70.293, 95.022, or
164.952. Individuals who are eligible, pursuant to this subdivision,
to be included in the Kentucky Employees Health Plan as provided
by KRS 18A.225 to 18A.2287 may be rated as a separate class
from other eligible employees and retirees for the purpose of
determining medical insurance premiums.
(c)For recipients of a retirement allowance who are not eligible for the same
level of hospital and medical benefits as recipients living in Kentucky having
the same Medicare hospital and medical insurance eligibility status, the board
shall provide a medical insurance reimbursement plan as described in
subsection
(6)of this section.
(d)Notwithstanding anything in KRS Chapter 16 or 61 to the contrary, the board
of trustees, in its discretion, may take necessary steps to ensure compliance
with 42 U.S.C. secs. 300bb-1 et seq.
(a)Each employer participating in the Kentucky Employees Retirement System
or the State Police Retirement System as provided in KRS 16.505 to 16.652 or
61.510 to 61.705 shall contribute to the insurance trust fund established under
KRS 61.701 the amount necessary to provide the monthly contribution rate as
provided for under this section. Such employer contribution rate shall be
developed by appropriate actuarial method as a part of the determination of
each respective employer contribution rate determined under KRS 61.565.
(b)1. Each employer described in paragraph
(a)of this subsection shall deduct
from the creditable compensation of each member whose membership
date begins on or after September 1, 2008, an amount equal to one
percent (1%) of the member's creditable compensation. The deducted
amounts shall, at the discretion of the board, be credited to accounts
established pursuant to 26 U.S.C. sec. 401(h), within the funds
established in KRS 16.510 and 61.515, or the insurance trust fund
established under KRS 61.701. Notwithstanding the provisions of this
paragraph, a transfer of assets between the accounts established pursuant
to 26 U.S.C. sec. 401(h), within the funds established in KRS 16.510
and 61.515, and the insurance trust fund established under KRS 61.701
shall not be allowed.
2. The employer shall file the contributions as provided by subparagraph 1.
of this paragraph at the retirement office in accordance with KRS
61.675. Any interest or penalties paid on any delinquent contributions
shall be credited to accounts established pursuant to 26 U.S.C. sec.
401(h), within the funds established in KRS 16.510 and 61.515, or the
insurance trust fund established under KRS 61.701. Notwithstanding
any minimum compensation requirements provided by law, the
deductions provided by this paragraph shall be made, and the
compensation of the member shall be reduced accordingly.
3. Each employer shall submit payroll reports, contributions lists, and other
data as may be required by administrative regulation promulgated by the
board of trustees pursuant to KRS Chapter 13A.
4. Every member shall be deemed to consent and agree to the deductions
made pursuant to this paragraph, and the payment of salary or
compensation less the deductions shall be a full and complete discharge
of all claims for services rendered by the person during the period
covered by the payment, except as to any benefits provided by KRS
16.505 to 16.652 or 61.510 to 61.705. No member may elect whether to
participate in, or choose the contribution amount to accounts established
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS
16.510 and 61.515, or the insurance trust fund established under KRS
61.701. The member shall have no option to receive the contribution
required by this paragraph directly instead of having the contribution
paid to accounts established pursuant to 26 U.S.C. sec. 401(h) within the
funds established in KRS 16.510 and 61.515, or the insurance trust fund
established under KRS 61.701. No member may receive a rebate or
refund of contributions. If a member establishes a membership date
prior to September 1, 2008, pursuant to KRS 61.552(2) or (3), then this
paragraph shall not apply to the member and all contributions previously
deducted in accordance with this paragraph shall be refunded to the
member without interest. The contribution made pursuant to this
paragraph shall not act as a reduction or offset to any other contribution
required of a member or recipient under KRS 16.505 to 16.652 or
61.510 to 61.705.
5. The board of trustees, at its discretion, may direct that the contributions
required by this paragraph be accounted for within accounts established
pursuant to 26 U.S.C. sec. 401(h) within the funds established in KRS
16.510 and 61.515, or the insurance trust fund established under KRS
61.701, through the use of separate accounts.
(a)The premium required to provide hospital and medical insurance plan
coverage under this section shall be paid wholly or partly from funds
contributed by:
1. The recipient of a retirement allowance, by payroll deduction from his
or her retirement allowance, or by other method;
2. The insurance trust fund established under KRS 61.701 or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510 and 61.515;
3. Another state-administered retirement system, including the County
Employees Retirement System, under a reciprocal arrangement, except
that any portion of the premium paid from the funds specified by
subparagraph 2. of this paragraph under a reciprocal agreement shall not
exceed the amount that would be payable under this section if all the
member's service were in the systems administered by the Kentucky
Retirement Systems. If the board provides for cross-referencing of
insurance premiums, the employer's contribution for the working
member or spouse shall be applied toward the premium, and the
insurance trust fund established under KRS 61.701 or accounts
established pursuant to 26 U.S.C. sec. 401(h) within the funds
established in KRS 16.510 and 61.515 shall pay the balance; or
4. A combination of the fund sources described by subparagraphs 1. to 3.
of this paragraph.
Group rates under the hospital and medical insurance plan shall be made
available to the spouse, each dependent child, and each disabled child,
regardless of the disabled child's age, of a recipient who is a former member
or the beneficiary, if the premium for the hospital and medical insurance for
the spouse, each dependent child, and each disabled child, or beneficiary is
paid by payroll deduction from the retirement allowance, electronic funds
transfer, or by another method. For purposes of this subsection only, a child
shall be considered disabled if he or she has been determined to be eligible for
federal Social Security disability benefits or meets the dependent disability
standard established by the Department of Employee Insurance in the
Personnel Cabinet.
(b)For a member who began participating in the system prior to July 1, 2003, the
monthly contribution rate shall be paid by the system from the funds specified
under paragraph (a)2. of this subsection and shall be equal to a percentage of
the single premium to cover the retired member as follows:
1. One hundred percent (100%) of the monthly premium for single
coverage shall be paid for a retired member who had two hundred forty
(240)months of service or more upon retirement or for a retired member
who when he or she was an employee became disabled as a direct result
of an act in line of duty as defined in KRS 16.505 or as a result of a
duty-related injury as defined in KRS 61.621;
2. Seventy-five percent (75%) of the monthly premium for single coverage
shall be paid for a retired member who had less than two hundred forty
(240)months of service but at least one hundred eighty
(180)months of
service upon retirement, provided such retired member agrees to pay the
remaining twenty-five percent (25%) by payroll deduction from his or
her retirement allowance, electronic funds transfer, or by another
method;
3. Fifty percent (50%) of the monthly premium for single coverage shall be
paid for a retired member who had less than one hundred eighty
months of service but had at least one hundred twenty
(120)months of
service upon retirement, provided such retired member agrees to pay the
remaining fifty percent (50%) by payroll deduction from his or her
retirement allowance, electronic funds transfer, or by another method; or
4. Twenty-five percent (25%) of the monthly premium for single coverage
shall be paid for a retired member who had less than one hundred twenty
(120)months of service but had at least forty-eight
(48)months of
service upon retirement, provided such retired member agrees to pay the
remaining seventy-five percent (75%) by payroll deduction from his or
her retirement allowance, electronic funds transfer, or by another
method.
(c)Notwithstanding paragraph
(b)of this subsection, for a member participating
in the system prior to July 1, 2003, who:
1. Dies as a direct result of an act in line of duty as defined in KRS 16.505
or dies as a result of a duty-related injury as defined in KRS 61.621, the
monthly premium shall be paid for his or her spouse so long as the
spouse remains eligible for a monthly retirement benefit;
2. Becomes totally and permanently disabled as defined in KRS 16.582 as
a direct result of an act in line of duty as defined in KRS 16.505 or
becomes disabled as a result of a duty-related injury as defined in KRS
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the
monthly premium shall be paid for his or her spouse so long as the
member and the spouse individually remain eligible for a monthly
retirement benefit; and
3. Dies as a direct result of an act in line of duty as defined in KRS 16.505,
dies as a result of a duty-related injury as defined in KRS 61.621,
becomes totally and permanently disabled as defined in KRS 16.582 as a
direct result of an act in line of duty as defined in KRS 16.505, or
becomes disabled as a result of a duty-related injury as defined in KRS
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a), the
monthly premium shall be paid for each dependent child as defined in
KRS 16.505, so long as the member remains eligible for a monthly
retirement benefit, unless deceased, and each dependent child
individually remains eligible under KRS 16.505.
(d)1. For a member who began participating in the system prior to July 1,
2003, who was determined to be in a hazardous position in the Kentucky
Employees Retirement System or in a position in the State Police
Retirement System, or who is receiving a retirement allowance based on
General Assembly service, the funds specified under paragraph (a)2. of
this subsection shall also pay a percentage of the monthly contribution
rate sufficient to fund the premium costs for hospital and medical
insurance coverage for the spouse and for each dependent child of a
recipient.
2. The percentage of the monthly contribution rate paid for the spouse and
each dependent child of a recipient who was in a hazardous position or
who is receiving a retirement allowance based on General Assembly
service in accordance with subparagraph 1. of this paragraph shall be
based solely on the member's service in a hazardous position using the
formula in paragraph
(b)of this subsection.
(e)For members who begin participating in the system on or after July 1, 2003:
1. Participation in the insurance benefits provided under this section shall
not be allowed until the member has earned at least one hundred twenty
(120)months of service in the state-administered retirement systems,
except that for members who begin participating in the system on or
after September 1, 2008, participation in the insurance benefits provided
under this section shall not be allowed until the member has earned at
least one hundred eighty
(180)months of service credited under KRS
16.543(1) or 61.543(1), or another state-administered retirement system.
2. A member who meets the minimum service requirements as provided by
subparagraph 1. of this paragraph shall upon retirement be eligible for
the following monthly contribution rate to be paid on his or her behalf,
or on behalf of the spouse or dependent of a member with service in a
hazardous position, from the funds specified under paragraph (a)2. of
this subsection:
a. For members with service in a nonhazardous position, a monthly
insurance contribution of ten dollars ($10) for each year of service
as a participating employee in a nonhazardous position;
b. For members with service in a hazardous position or who
participate in the State Police Retirement System, a monthly
insurance contribution of fifteen dollars ($15) for each year of
service as a participating employee in a hazardous position or the
State Police Retirement System; and
c. Upon the death of the retired member, the beneficiary, if the
beneficiary is the member's spouse, shall be entitled to a monthly
insurance contribution of ten dollars ($10) for each year of service
the member attained as a participating employee in a hazardous
position. 3. The minimum service requirement to participate in benefits as provided
by subparagraph 1. of this paragraph shall be waived for a member who
receives a satisfactory determination of a hazardous disability that is a
direct result of an act in line of duty as defined in KRS 16.505, and the
member shall be entitled to the benefits payable under this subsection as
though the member had twenty
(20)years of service in a hazardous
position. 4. The minimum service required to participate in benefits as provided by
subparagraph 1. of this paragraph shall be waived for a member who is
disabled as a result of a duty-related injury as defined in KRS 61.621
and is eligible for the benefits provided by KRS 61.621(5)(b), and the
member shall be entitled to the benefits payable under this subsection as
though the member had twenty
(20)years of service in a nonhazardous
position. 5. Notwithstanding the provisions of this paragraph, the minimum service
requirement to participate in benefits as provided by subparagraph 1. of
this paragraph shall be waived for a for a member who dies as a direct
result of an act in line of duty as defined in KRS 16.505, who becomes
totally and permanently disabled as defined in KRS 16.582 as a direct
result of an act in line of duty as defined in KRS 16.505, who dies as a
result of a duty-related injury as defined in KRS 61.621, or who
becomes disabled as a result of a duty-related injury as defined in KRS
61.621 and is eligible for the benefits provided by KRS 61.621(5)(a),
and the premium for the member, the member's spouse, and for each
dependent child as defined in KRS 16.505 shall be paid in full by the
systems so long as the member, member's spouse, or dependent child
individually remains eligible for a monthly retirement benefit. 6. Except as provided by subparagraph 5. of this paragraph, the monthly
insurance contribution amount shall be increased:
a. On July 1 of each year by one and one-half percent (1.5%). The
increase shall be cumulative and shall continue to accrue after the
member's retirement for as long as a monthly insurance
contribution is payable to the retired member or beneficiary but
shall not apply to any increase in the contribution attributable to
the increase specified by subdivision b. of this subparagraph; and
b. On January 1 of each year by five dollars ($5) for members who
have accrued an additional full year of service as a participating
employee beyond the career threshold, subject to the following
restrictions:
i. The additional insurance contribution provided by this
subdivision shall only be applied to the monthly contribution
amounts provided under subparagraph 2.a. and b. of this
paragraph;
ii. The additional insurance contribution provided by this
subdivision shall only be payable towards the health plans
offered by the system to retirees who are not eligible for
Medicare or for reimbursements provided to retirees not
eligible for Medicare pursuant to subsection (6)(a)2. of this
section; and
iii. In order for the annual increase to occur as provided by this
subdivision, the funding level of retiree health benefits for
the system in which the employee is receiving the additional
insurance contribution shall be at least ninety percent (90%)
as of the most recent actuarial valuation and be projected by
the actuary to remain ninety percent (90%) for the year in
which the increase is provided. 7. The benefits of this paragraph provided to a member whose participation
begins on or after July 1, 2003, shall not be considered as benefits
protected by the inviolable contract provisions of KRS 16.652 or
61.692. The General Assembly reserves the right to suspend or reduce
the benefits conferred in this paragraph if in its judgment the welfare of
the Commonwealth so demands. 8. An employee whose membership date is on or after September 1, 2008,
who retires and is reemployed in a regular full-time position required to
participate in the system or the County Employees Retirement System
shall not be eligible for health insurance coverage or benefits provided
by this section and shall take coverage with his or her employing agency
during the period of reemployment in a regular full-time position. 9. For purposes of this paragraph:
a. "Career threshold" for a member with service in a nonhazardous
position means twenty-seven
(27)years of service credited under
KRS 16.543(1), 61.543(1), 78.615(1), or another state-
administered retirement system and for a member with service in a
hazardous position means the service requirements specified by
KRS 16.577(2) or
(3)or 16.583(6)(b), as applicable; and
b. "Funding level" means the actuarial value of assets divided by the
actuarially accrued liability expressed as a percentage that is
determined and reported by the system's actuary in the annual
actuarial valuation.
(f)For members with service in another state-administered retirement system
who select hospital and medical insurance plan coverage through the system:
1. The system shall compute the member's combined service, including
service credit in another state-administered retirement system, and
calculate the portion of the member's premium monthly contribution rate
to be paid by the funds specified under paragraph (a)2. of this subsection
according to the criteria established in paragraphs
(a)to
(e)of this
subsection. Each state-administered retirement system shall pay
annually to the insurance trust fund established under KRS 61.701 the
portion of the system's cost of the retiree's monthly contribution for
single coverage for hospital and medical insurance plan which shall be
equal to the percentage of the member's number of months of service in
the other state-administered retirement plan divided by his or her total
combined service and in conjunction with the reciprocal agreement
established between the system and the other state-administered
retirement systems. The amounts paid by the other state-administered
retirement plans and by the Kentucky Retirement Systems from funds
specified under paragraph (a)2. of this subsection shall not be more than
one hundred percent (100%) of the monthly contribution adopted by the
respective boards of trustees;
2. A member may not elect coverage for hospital and medical benefits
through more than one
(1)of the state-administered retirement systems;
and
3. A state-administered retirement system shall not pay any portion of a
member's monthly contribution for medical insurance unless the
member is a recipient or annuitant of the plan.
(5)Premiums paid for hospital and medical insurance coverage procured under
authority of this section shall be exempt from any premium tax which might
otherwise be required under KRS Chapter 136. The payment of premiums by the
funds described by subsection (4)(a)2. of this section shall not constitute taxable
income to an insured recipient. No commission shall be paid for hospital and
medical insurance procured under authority of this section.
(a)The board shall promulgate an administrative regulation to establish a medical
insurance reimbursement plan to provide reimbursement for hospital and
medical insurance plan premiums of recipients of a retirement allowance who:
1. Are not eligible for the same level of hospital and medical benefits as
recipients living in Kentucky and having the same Medicare hospital
and medical insurance eligibility status; or
2. Are eligible for retiree health subsidies as provided by subsection (4)(e)
of this section, except for those recipients eligible for full premium
subsidies under subsection (4)(e)5. of this section. The reimbursement
program as provided by this subparagraph shall be available to the
recipient regardless of the hospital and medical insurance plans offered
by the systems.
(b)An eligible recipient shall file proof of payment for hospital and medical
insurance plan coverage with the retirement office. Reimbursement to eligible
recipients shall be made on a quarterly basis. The recipient shall be eligible
for reimbursement of substantiated medical insurance premiums for an
amount not to exceed the total monthly contribution rate determined under
subsection
(4)of this section.
(c)For purposes of recipients described by paragraph (a)1. of this subsection, the
plan shall not be made available if all recipients are eligible for the same
coverage as recipients living in Kentucky.