ASSEMBLY, No. 430

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblyman KELLY

 

 

An Act concerning coverage under the State Health Benefits Program of certain retired members of the Police and Firemen's Retirement System of New Jersey, amending N.J.S.40A:10-23, and supplementing P.L.1961, c.49 (C.52:14-17.25 et seq.).

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. (New section) A qualified retiree from the Police and Firemen's Retirement System of New Jersey established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.) and dependents of a qualified retiree, including survivors, are eligible to participate in the State Health Benefits Program.

    A qualified retiree is a retiree who:

    a. retired on a benefit based on 25 or more years of service credit; or

    b. retired, based on fewer years of service, on an ordinary disability retirement allowance pursuant to section 6 of P.L.1944, c.255 (C.43:16A-6) or an accidental disability retirement allowance pursuant to section 7 of P.L.1944, c.255 (C.43:16A-7).

    A retiree who elected deferred retirement is not a qualified retiree.

    The employer shall reimburse a qualified retiree or survivor who participates in the program for the premium charges under Part B of the federal Medicare program for the retiree and the retiree's spouse or for the survivor, as appropriate.

    The premium or periodic charges for benefits provided to a qualified retiree and the dependents of the retiree, including survivors, and the cost for reimbursement of Medicare premiums shall be paid by the employer. The State Health Benefits Commission shall annually certify to the employer the cost for providing health benefits coverage to qualified retirees and their dependents, including survivors, under this section. The employer shall annually remit to the commission the amount certified at a time specified by the State Treasurer.

    A qualified retiree who retired prior to the effective date of this amendatory and supplementary act, P.L. , c. , is eligible for coverage if the retiree applies to the program within one year after the effective date.

    The provisions of this section shall not apply to any member of the retirement system who is a retired State employee and whose premiums or periodic charges for benefits under the program are paid by the State pursuant to section 8 of P.L.1961, c.49 (C.52:14-17.32).

    The provisions of this section shall not affect coverage under any existing health benefits contract between a qualified retiree and the employer nor limit additional health benefits coverage agreed to by the retiree and employer.

 

    2. N.J.S.40A:10-23 is amended to read as follows:

    40A:10-23. Payment of premiums after retirement.

    a. Retired employees shall be required to pay for the entire cost of coverage for themselves and their dependents at rates which are deemed to be adequate to cover the benefits, as affected by Medicare, of the retired employees and their dependents on the basis of the utilization of services which may be reasonably expected of the older age classification; provided, however, that the total rate payable by a retired employee for himself and his dependents, for coverage under the contract and for Part B of Medicare, shall not exceed by more than 25% the total amount that would have been required to have been paid by the employee and his employer for the coverage maintained had he continued in office or active employment and he and his dependents were not eligible for Medicare benefits.

    b. The employer may, in its discretion, assume the entire cost of such coverage and pay all of the premiums for employees who have retired on a disability pension or after 25 years' or more service with the employer, or have retired and reached the age of 62 or older with at least 15 years of service with the employer, including the premiums on their dependents, if any, under uniform conditions as the governing body of the local unit shall prescribe, except that retired employees who are eligible for and upon retirement elect to take paid coverage under the State Health Benefits Program pursuant to section 1 of P.L. , c. (C. ) (now pending before the Legislature as this bill) shall not be eligible for employer-paid coverage under this subsection. The period of time a county law enforcement officer has been employed by any county or municipal police department, sheriff's department or county prosecutor's office, may be counted cumulatively as "service with the employer" for the purpose of qualifying for payment of health insurance premiums by the county pursuant to this section.

    c. The employer may, in its discretion, provide additional health benefits coverage for retirees who elect to take paid coverage under the State Health Benefits Program pursuant to section 1 of P.L. , c.     (C. ) (now pending before the Legislature as this bill), and may assume the cost of such coverage, upon agreement between the retiree and the employer.

(cf: P.L.1993, c.300, s.1)

 

    3. (New section) Notwithstanding the provisions of any other law to the contrary, beginning July 1, 1995 any difference in the employer contributions required as a result of the revisions under section 16 of P.L.1994, c.62 under the Police and Firemen's Retirement System and the original employer contributions determined by the State Treasurer under the law prior to the pension revisions under section 16 of that act shall be applied to cover any increased costs to employers resulting from this amendatory and supplementary act, P.L. , c. (C. ).

 

    4. This act shall take effect on the first day of the fourth month after enactment.

 

 

STATEMENT

 

    This bill extends to members of the Police and Firemen's Retirement System of New Jersey (PFRS) who retire with 25 or more years of service credit or on a disability retirement allowance coverage in the State Health Benefits Program (SHBP) at the expense of the employer. Qualified retirees would also be reimbursed by the employer for their premium charges under Part B of the Medicare program. The Teachers' Pension and Annuity Fund, the Public Employees' Retirement System, the Judicial Retirement System, and the State Police Retirement System all currently provide this coverage. In addition, the bill provides the same health benefits coverage to survivors of such PFRS retirees.

    The bill also permits employers of retirees who elect to participate in the SHBP to provide and assume the cost of additional health benefits coverage (for example, dental costs, which are not now covered for retirees under the SHBP).

    The program is paid for by changes in the pension adjustment benefit annual index assumption and the average assumed percentage rate of salary increase used in calculating pension system liability adopted in P.L.1994, c.62. It is estimated that local government employers will have reduced contributions as a result of these pension revisions that will far exceed the cost of the coverage required by this bill. Local government employers currently offering local health benefit retirement programs will experience significant additional cost savings.

    At present, PFRS members employed by units of local government receive employer-paid health insurance coverage upon retirement through the SHBP or another plan only if their employer chooses to provide paid coverage. The bill allows all qualified PFRS retirees to participate in the SHBP. Qualified retirees of non-SHBP participating employees could elect to accept SHBP coverage at the expense of the employer or to continue in their employer's program. State employees who are qualified retirees from PFRS currently receive paid coverage upon retirement at the expense of the State and would continue to do so.

 

 

 

Provides paid SHBP coverage to 25-year retirees and disability retirees of PFRS.