MISSISSIPPI LEGISLATURE
2005 Regular Session
To: Insurance; Appropriations
By: Representative Smith (27th)
AN ACT TO AMEND SECTION 25-15-15, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE STATE SHALL PAY THE FULL COST OF HEALTH INSURANCE FOR PUBLIC SCHOOL TEACHERS WHO HAVE RETIRED UNDER THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM; TO AMEND SECTION 25-11-143, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 25-15-15, Mississippi Code of 1972, is amended as follows:
[Through June 30 of the year in which Section 25-11-143 becomes effective as provided in subsection (1) of Section 25-11-143, this section shall read as follows:]
25-15-15. (1) The board is authorized to determine the manner in which premiums and contributions by the state agencies, local school districts, colleges, universities, community/junior colleges and public libraries shall be collected to provide the self-insured health insurance program for employees as provided under this article. The state shall provide fifty percent (50%) of the cost of the above life insurance plan and one hundred percent (100%) of the cost of the above health insurance plan for all active full-time employees and public school teachers who have retired under the Public Employees' Retirement System. The active full-time employees shall be given the opportunity to purchase coverage for their eligible dependents with the premiums for such dependent coverage as well as the employee's fifty percent (50%) share for his life insurance coverage to be deductible from the employee's salary by the agency, department or institution head, which deductions, together with the fifty percent (50%) share of such life insurance premiums of such employing agency, department or institution head from funds appropriated to or authorized to be expended by such employing agency, department or institution head, shall be deposited directly into a depository bank or special fund in the State Treasury, as determined by the board. These funds and interest earned on these funds may be used for the disbursement of claims and shall be exempt from the appropriation process.
(2) The state shall provide annually, by line item in the Mississippi Library Commission appropriation bill, such funds to pay one hundred percent (100%) of the cost of health insurance under the State and School Employees Health Insurance Plan for all full-time library staff members in each public library in Mississippi. The commission shall allot to each public library a sufficient amount of those funds appropriated to pay the costs of insurance for eligible employees. Any funds so appropriated by line item which are not expended during the fiscal year for which such funds were appropriated shall be carried forward for the same purposes during the next succeeding fiscal year. If any premiums for the health insurance and/or late charges and interest penalties are not paid by a public library in a timely manner, as defined by the board, the Mississippi Library Commission, upon notice by the board, shall immediately withhold all subsequent disbursements of funds to that public library.
(3) The state shall annually provide one hundred percent (100%) of the cost of the health insurance plan for all public school district employees who work no less than twenty (20) hours during each week and regular nonstudent school bus drivers. Where federal funding is allowable to defray, in full or in part, the cost of participation in the program by district employees who work no less than twenty (20) hours during the week and regular nonstudent bus drivers, whose salaries are paid, in full or in part, by federal funds, the allowance under this section shall be reduced to the extent of such federal funding. Where the use of federal funds is allowable but not available, it is the intent of the Legislature that school districts contribute the cost of participation for such employees from local funds, except that parent fees for child nutrition programs shall not be increased to cover such cost.
(4) The state shall provide annually, by line item in the community/junior college appropriation bill, such funds to pay one hundred percent (100%) of the cost of the health insurance plan for all community/junior college district employees who work no less than twenty (20) hours during each week.
(5) When the use of federal funding is allowable to defray, in full or in part, the cost of participation in the insurance plan by community/junior college district employees who work no less than twenty (20) hours during each week, whose salaries are paid, in full or in part, by federal funds, the allowance under this section shall be reduced to the extent of the federal funding. Where the use of federal funds is allowable but not available, it is the intent of the Legislature that community/junior college districts contribute the cost of participation for such employees from local funds.
(6) Any community/junior college district may contribute to the cost of coverage for any district employee from local community/junior college district funds, and any public school district may contribute to the cost of coverage for any district employee from nonminimum program funds. Any part of the cost of such coverage for participating employees of public school districts and public community/junior college districts that is not paid by the state shall be paid by the participating employees, which shall be deducted from the salaries of the employees in a manner determined by the board.
(7) Any funds appropriated for the cost of insurance by line item in the community/junior colleges appropriation bill which are not expended during the fiscal year for which such funds were appropriated shall be carried forward for the same purposes during the next succeeding fiscal year.
(8) The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all premiums for life and health insurance permitted under Chapter 15 of Title 25. All funds in excess of the amount needed for disbursement of claims shall be deposited in a special fund in the State Treasury to be known as the State and School Employees Insurance Fund. The State Treasurer shall invest all funds in the State and School Employees Insurance Fund and all interest earned shall be credited to the State and School Employees Insurance Fund. Such funds shall be placed with one or more depositories of the state and invested on the first day such funds are available for investment in certificates of deposit, repurchase agreements or in United States Treasury bills or as otherwise authorized by law for the investment of Public Employees' Retirement System funds, as long as such investment is made from competitive offering and at the highest and best market rate obtainable consistent with any available investment alternatives; however, such investments shall not be made in shares of stock, common or preferred, or in any other investments which would mature more than one (1) year from the date of investment. The board shall have the authority to draw from this fund periodically such funds as are necessary to operate the self-insurance plan or to pay to the insurance carrier the cost of operation of this plan, it being the purpose to limit the amount of participation by the state to fifty percent (50%) of the cost of the life insurance program and not to limit the contracting for additional benefits where the cost will be paid in full by the employee. The state shall not share in the cost of coverage for retired employees.
(9) The board shall also provide for the creation of an Insurance Reserve Fund and funds therein shall be invested by the State Treasurer with all interest earned credited to the State and School Employees Insurance Fund.
(10) Except as otherwise provided herein for public school teachers who are retired under the Public Employees' Retirement System, any retired employee electing to purchase retired life and health insurance will have the full cost of such insurance deducted monthly from his State of Mississippi retirement plan check or direct billed for the cost of the premium if the retirement check is insufficient to pay for the premium. If the board determines actuarially that the premium paid by the participating retirees adversely affects the overall cost of the plan to the state, then the department may impose a premium surcharge, not to exceed fifteen percent (15%), upon such participating retired employees who are under the age for Medicare eligibility.
[From and after July 1 of the year in which Section 25-11-143 becomes effective as provided in subsection (1) of Section 25-11-143, this section shall read as follows:]
25-15-15. (1) The board may determine the manner in which premiums and contributions by the state agencies, local school districts, colleges, universities, community/junior colleges and public libraries will be collected to provide the self-insured health insurance program for employees as provided under this article. The state shall provide fifty percent (50%) of the cost of the above life insurance plan and one hundred percent (100%) of the cost of the above health insurance plan for all active full-time employees and public school teachers who are retired under the Public Employees' Retirement System. The employees shall be given the opportunity to purchase coverage for their eligible dependents with the premiums for the dependent coverage, as well as the employee's fifty percent (50%) share for his life insurance coverage, to be deductible from the employee's salary by the agency, department or institution head. Those deductions, together with the fifty percent (50%) share of the life insurance premiums of the employing agency, department or institution head from funds appropriated to or authorized to be expended by the employing agency, department or institution head, shall be deposited directly into a depository bank or special fund in the State Treasury, as determined by the board. These funds and interest earned on these funds may be used for the disbursement of claims and shall be exempt from the appropriation process.
(2) The state shall provide annually, by line item in the Mississippi Library Commission appropriation bill, the funds to pay one hundred percent (100%) of the cost of health insurance under the State and School Employees Health Insurance Plan for all full-time library staff members in each public library in Mississippi. The commission shall allot to each public library a sufficient amount of those funds appropriated to pay the costs of insurance for eligible employees. Any funds so appropriated by line item that are not expended during the fiscal year for which the funds were appropriated shall be carried forward for the same purposes during the next succeeding fiscal year. If any premiums for the health insurance and/or late charges and interest penalties are not paid by a public library in a timely manner, as defined by the board, the Mississippi Library Commission, upon notice by the board, shall immediately withhold all subsequent disbursements of funds to that public library.
(3) The state shall annually provide one hundred percent (100%) of the cost of the health insurance plan for all public school district employees who work no less than twenty (20) hours during each week and regular nonstudent school bus drivers. Where federal funding is allowable to defray, in full or in part, the cost of participation in the program by district employees who work no less than twenty (20) hours during the week and regular nonstudent bus drivers, whose salaries are paid, in full or in part, by federal funds, the allowance under this section shall be reduced to the extent of that federal funding. Where the use of federal funds is allowable but not available, it is the intent of the Legislature that school districts contribute the cost of participation for the employees from local funds, except that parent fees for child nutrition programs shall not be increased to cover that cost.
(4) The state shall provide annually, by line item in the community/junior college appropriation bill, the funds to pay one hundred percent (100%) of the cost of the health insurance plan for all community/junior college district employees who work no less than twenty (20) hours during each week.
(5) When the use of federal funding is allowable to defray, in full or in part, the cost of participation in the insurance plan by community/junior college district employees who work no less than twenty (20) hours during each week, whose salaries are paid, in full or in part, by federal funds, the allowance under this section shall be reduced to the extent of the federal funding. Where the use of federal funds is allowable but not available, it is the intent of the Legislature that community/junior college districts contribute the cost of participation for the employees from local funds.
(6) Any community/junior college district may contribute to the cost of coverage for any district employee from local community/junior college district funds, and any public school district may contribute to the cost of coverage for any district employee from nonminimum program funds. Any part of the cost of the coverage for participating employees of public school districts and public community/junior college districts that is not paid by the state shall be paid by the participating employees, which shall be deducted from the salaries of the employees in a manner determined by the board.
(7) Any funds appropriated for the cost of insurance by line item in the community/junior colleges appropriation bill that are not expended during the fiscal year for which the funds were appropriated shall be carried forward for the same purposes during the next succeeding fiscal year.
(8) The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all premiums for life and health insurance permitted under Chapter 15 of Title 25. All funds in excess of the amount needed for disbursement of claims shall be deposited in a special fund in the State Treasury to be known as the State and School Employees Insurance Fund. The State Treasurer shall invest all funds in the State and School Employees Insurance Fund and all interest earned shall be credited to the State and School Employees Insurance Fund. Those funds shall be placed with one or more depositories of the state and invested on the first day that the funds are available for investment in certificates of deposit, repurchase agreements or in United States Treasury bills or as otherwise authorized by law for the investment of Public Employees' Retirement System funds, as long as the investment is made from competitive offering and at the highest and best market rate obtainable consistent with any available investment alternatives. However, those investments shall not be made in shares of stock, common or preferred, or in any other investments that would mature more than one (1) year from the date of investment. The board shall have the authority to draw from this fund periodically such funds as are necessary to operate the self-insurance plan or to pay to the insurance carrier the cost of operation of this plan, it being the purpose to limit the amount of participation by the state to fifty percent (50%) of the cost of the life insurance program and not to limit the contracting for additional benefits where the cost will be paid in full by the employee.
(9) The board shall also provide for the creation of an Insurance Reserve Fund, and funds in the reserve fund shall be invested by the State Treasurer with all interest earned credited to the State and School Employees Insurance Fund.
SECTION 2. Section 25-11-143, Mississippi Code of 1972, is amended as follows:
25-11-143. (1) This provision of this section shall become effective from and after July 1 of the year following the year in which the board determines and the board's actuary certifies that the employer's contribution rate to the Public Employees' Retirement System can be reduced by one percent (1%) without causing the unfunded accrued actuarial liability amortization period for the retirement system to exceed twenty (20) years.
(2) As used in this section, the term "retiree" means any person receiving a service or disability retirement benefit from any system administered by the board; however, in the case of persons participating in the optional retirement plan established in Section 25-11-401 et seq., the term "retiree" includes only those persons who would be entitled to receive a retirement allowance under the provisions of Section 25-11-111 if they were not members of the optional retirement plan.
(3) The board shall design a plan of health insurance for all current and future retirees that will take effect from and after January 1 following the year in which this section becomes effective as provided in subsection (1) of this section. The plan may include coverage for the spouse, surviving beneficiary and dependent children of retirees and other such sponsored dependents as the board considers appropriate; however, the subsidy provided for in this section shall apply only to the cost of providing coverage to retirees. Initially, the plan shall have benefits equivalent to those in the State and School Employees Health Insurance Plan established in Section 25-15-9; however, the board may modify the plan as necessary to meet the needs of the members of the plan and to maintain the fiscal soundness of the plan. The board may offer an optional plan to retirees who are eligible for Medicare, and any additional cost of that plan shall be paid by the retiree electing that optional coverage.
(4) (a) Retirees may decline coverage in the plan established by this section, but they may be included in the plan later if they apply for coverage during any open enrollment periods that may be established by the board and can show, by evidence considered sufficient to the board, that they were covered by health insurance during the period of time that they were not covered by the plan established by this section. The board may adjust the amount of the subsidy for those persons and may limit the number of times retirees who decline coverage who may be later included in the plan.
(b) The board shall determine the manner in which persons who elect continuation coverage under the federal Consolidated Omnibus Budget Reconciliation Act of 1987 (COBRA) will be treated regarding their eligibility for coverage under the plan established under this section and the amount of the subsidy for those persons.
(5) From and after January 1 following the year in which this section becomes effective as provided in subsection (1) of this section, the board shall subsidize a portion of the cost of providing the plan of health insurance to retirees. The amount of the subsidy provided for each retiree shall be equal to a percentage of the annual cost of providing coverage under the plan to the retiree as determined by the board. Except as otherwise provided in this section, the percentage amount of the subsidy shall be two percent (2%) for each year of creditable service, less any fronted service for age-limited disability benefits of the retiree up to a maximum of sixty percent (60%). Once the percentage amount of the subsidy has been determined under this subsection, it may not be changed unless the retiree returns to membership service and earns additional years of creditable service or elects not to be enrolled in the plan for a period of time. However, the state shall provide one hundred percent (100%) of the cost of the health insurance plan for public school teachers who have retired under the Public Employees' Retirement System.
(6) The amount of the subsidy for each disability retiree shall be calculated in the same manner as other retirees. For purposes of determining the amount that a disability retiree must pay above the subsidy for coverage under the plan, the cost of coverage for disability retirees shall be deemed to be the average cost of providing coverage for other retirees as determined by the board.
(7) Each retiree participating in the plan, by written authorization, shall instruct the board to deduct from the retirement allowance the portion of the premium that is not subsidized. The amounts so deducted shall be handled by the board in the manner provided for in subsection (9) of this section.
(8) From and after July 1 of the year in which this section becomes effective as provided in subsection (1) of this section, each employer shall pay monthly to the board an amount equal to two and one-half percent (2.5%) of the total payroll of the employer on which retirement contributions are made under retirement plans administered by the Public Employees' Retirement System.
(9) The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all contributions required under this section. After appropriation for administration expenses of the program, all funds received by the board under this section shall be held in a fund in the custody of the board. All those funds held by the board shall be utilized for the purpose of subsidizing the health insurance plan required to be established by this section, and shall be invested as provided in Section 25-11-145.
(10) The board:
(a) Shall administer the plan;
(b) Shall have the sole authority to promulgate rules and regulations governing the plan, and shall be vested with all legal authority necessary and proper to perform this function including, but not limited to, defining the benefits provided by the plan, requesting and accepting bids for services, establishing premium rates and receiving premium payments;
(c) May enter into contracts with accountants, actuaries and other persons whose skills are necessary to carry out the provisions of this section; and
(d) Is authorized to procure legal services if it deems these services necessary to carry out its responsibilities under this section.
SECTION 3. This act shall take effect and be in force from and after July 1, 2005.