HB 1591-FN-A - AS AMENDED BY THE SENATE
9Mar2016... 0889h
05/12/2016 1810s
2016 SESSION
\t16-2201
\t10/04
HOUSE BILL\t1591-FN-A
AN ACT\trelative to the health care premium contribution for retired state employees who are eligible for Medicare Parts A and B due to age or disability, relative to funding of retiree health benefits, and making an appropriation to the department of administrative services.
SPONSORS:\tRep. L. Ober, Hills. 37; Rep. Weyler, Rock. 13; Rep. Barry, Hills. 21; Rep. Umberger, Carr. 2
COMMITTEE:\tSpecial Committee on Public Employee Pension Plans
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AMENDED ANALYSIS
\tThis bill requires premium contribution amounts for retiree health benefits for retired state employees who are Medicare eligible and establishes a waiver program for qualifying retirees. The bill continues the premium contributions for retired persons receiving medical and surgical benefits who become Medicare eligible on or after July 1, 2016 until separate rates are approved effective January 1, 2017. The bill makes an appropriation to the department of administrative services for a health care consultant to design a long-term retiree health care funding plan. This bill also provides the department of administrative services, risk management unit with funding for state retiree heath plan costs for the biennium ending June 30, 2017.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
9Mar2016... 0889h\t16-2201
05/12/2016 1810s\t10/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Sixteen
AN ACT\trelative to the health care premium contribution for retired state employees who are eligible for Medicare Parts A and B due to age or disability, relative to funding of retiree health benefits, and making an appropriation to the department of administrative services.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 Department of Administrative Services; State Employees Group Insurance; Retiree Medical Benefits. Amend RSA 21-I:30, II to read as follows:
\t\tII.(a) The state shall pay a partial premium for each Medicare-eligible retired employee, as defined in paragraphs VI and VII of this section, and his or her spouse for their lifetimes, toward group hospitalization, hospital medical care, surgical care and other medical benefits plan or a self-funded alternative within the limits of the funds appropriated at each legislative session and providing any change in plan is approved by the fiscal committee of the general court prior to its adoption.
\t\t\t(b) A retired employee and/or spouse receiving medical and surgical benefits provided under this section who becomes eligible for Medicare Parts A and B due to age or disability on or after July 1, 2016, shall continue payment of the percentage of premium contribution determined under paragraph XIII.
\t\t\t(c) Retired employees who are eligible for Medicare may voluntarily cease participation in plan benefits at any time and may reenroll without restriction.
\t2 Department of Administrative Services; State Employees Group Insurance; Retiree Medical Benefits; Premium Contribution. Amend RSA 21-I:30, XIII to read as follows:
\t\tXIII.(a) The commissioner of administrative services shall invoice and collect from retired state employees and/or each applicable spouse [who are not Medicare eligible and] receiving medical and surgical benefits provided under this section, who do not receive a retirement allowance as defined in RSA 100-A:1, XXII, [a] the premium contribution amount for either Medicare-eligible or non-Medicare-eligible retiree health benefit plans based on a percentage of the total monthly premium attributable to the applicable retiree and/or spouse, as determined by the commissioner of administrative services, with prior approval by the fiscal committee of the general court[, provided the percentage is not lower than 12.5 percent]. Beginning January 1 2017, the commissioner of administrative services shall determine, with prior approval by the fiscal committee of the general court, a premium contribution amount for Medicare-eligible retiree health benefit plans and a premium contribution amount for non-Medicare-eligible retiree health benefit plans.
\t\t\t(b) Retired state employees and/or spouses under subparagraph (a) who become eligible for Medicare Parts A and B due to age or disability on or after July 1, 2016, shall continue payment of the premium contribution amount based on a percentage of the total monthly premium attributable to the applicable retiree and/or spouse, as approved by the fiscal committee of the general court under subparagraph (a). The commissioner of administrative service is authorized to invoice and collect such contribution amounts.
\t\t\t(c) The commissioner of administrative services is also authorized to invoice and collect from such other participants contribution amounts as specified by law.
\t\t\t(d) Collected amounts shall be deposited in the employee and retiree benefit risk management fund. Failure to remit payment of the contribution amount in full within 30 days of billing shall be grounds for terminating benefits, effective from the beginning of the billing period. Reenrollment shall be dependent upon payment of any outstanding contribution or other amounts within 6 months of the termination date. If a participant fails to remit payment in full for participation within 30 days of billing, on the 30th day the participant shall be notified by certified mail, return receipt requested, that he or she shall remit payment to the department within 10 business days of receiving the letter or his or her benefits shall be terminated effective upon the 10th business day after receipt of the letter and that reenrollment shall be dependent upon payment of any outstanding contribution or other amount within 6 months of the termination date.
\t3 New Hampshire Retirement System; Deductions; Retiree Medical Benefits. Amend RSA 100-A:54, III to read as follows:
\t\tIII.(a) The retirement system shall deduct from the monthly retirement allowance of retired state employees and/or each applicable spouse [who are not Medicare eligible and] receiving medical and surgical benefits provided pursuant to RSA 21-I:30, [a] the premium contribution amount for either Medicare-eligible or non-Medicare-eligible retiree health benefit plans based on a percentage of the total monthly premium attributable to the applicable retiree and/or spouse, as determined by the commissioner of administrative services with prior approval by the fiscal committee of the general court [provided the percentage is not lower than 12.5 percent] under RSA 21-I:30, XIII.
\t\t\t(b) The retirement system shall continue to deduct from the monthly retirement allowance of a retired state employee and/or spouse receiving medical and surgical benefits provided pursuant to RSA 21-I:30, who become eligible for Medicare Parts A and B due to age or disability on or after July 1, 2016 the premium contribution amount based on a percentage of the total monthly premium attributable to the applicable retiree and/or spouse as approved by the fiscal committee of the general court under RSA 21-I:30, XIII.
\t\t\t(c) The department of administrative services shall provide information as to the total monthly premium cost for each participant to the retirement system for purposes of calculating this deduction. Deducted amounts, which shall be in addition to and notwithstanding any amounts payable by the retirement system pursuant to RSA 100-A:52, RSA 100-A:52-a, and RSA 100-A:52-b, shall be deposited in the employee and retiree benefit risk management fund. In the event the retiree’s monthly allowance is insufficient to cover the certified contribution amount, the retirement system shall so notify the department of administrative services, which shall invoice and collect from the retiree and/or each applicable spouse the remaining contribution amount. Failure to remit payment of the contribution amount in full within 30 days of billing shall be grounds for terminating benefits, effective from the beginning of the billing period. Reenrollment shall be dependent upon payment of any outstanding contribution or other amounts within 6 months of the termination date. The department of administrative services shall provide notice of the termination of benefits as provided in RSA 21-I:30, XIII.
\t4 Judicial Retirement Plan; Deductions; Retiree Health Insurance. Amend RSA 100-C:11-a to read as follows:
\t100-C:11-a Retiree and Spouse Health Insurance Premium Contribution.
\t\tI. Retired judges and their applicable spouses [who are not Medicare eligible and] receiving medical and surgical benefits shall be responsible for payment of [a] the premium contribution amount for either Medicare-eligible or non-Medicare-eligible retiree health benefit plans based on a percentage of the total monthly premium attributable to the applicable retiree and/or spouse, as determined by the commissioner of administrative services, with prior approval by the fiscal committee of the general court[, provided the percentage is not lower than 12.5 percent] under RSA 21-I:30, XIII.
\t\tII. Retired judges and/or spouses receiving medical and surgical benefits under RSA 21-I:30 who become eligible for Medicare Parts A and B due to age or disability on or after July 1, 2016 shall continue to be responsible for payment of the premium contribution amount based on a percentage of the total monthly premium attributable to the applicable retiree and/or spouse as approved by the fiscal committee of the general court under RSA 21-I:30, XIII.
\t\tIII. The department of administrative services shall provide information as to the total monthly premium cost for each participant to the judicial retirement plan for purposes of calculating this deduction. The judicial retirement plan shall deduct the payment required under this section from the retiree’s monthly retirement allowance. Deducted amounts shall be remitted to the administrative office of the courts within 14 days along with a statement identifying from whom the deduction was made, and shall be used to pay for plan retiree and spouse health care expenses and any administrative costs related thereto.
\t5 Appropriation; Department of Administrative Services; Risk Management; Overtime. In addition to any other sums appropriated, the sum of $20,000 for the biennium ending June 30, 2017 is hereby appropriated to the department of administrative service for the purpose of overtime charged to the risk management accounting unit, class 18. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.
\t6 Health Care Consultant Contract; Benefit Plan; Appropriation.
\t\tI. The commissioner of administrative services is hereby authorized to contract with a health care consultant for the purpose of a long-term design for funding state retiree health benefits and to provide training for state retirees on the benefit plan and its funding. The total amount expended by the department of administrative services for the health care consultant contract, benefit plan design, and training shall not exceed $300,000.
\t\tII. The sum of up to $300,000 for the biennium ending June 30, 2017 is hereby appropriated to the commissioner of the department of administrative services for the purpose of payment for the cost of the contract with the health care consultant under paragraph I. The source of funds for the appropriation shall be the employee and retiree benefit risk management fund under RSA 21-I:30-e.
\t7 New Section; State Employees Group Insurance; State Retiree Health Benefits Cost-Sharing Waiver. Amend RSA 21-I by inserting after section 30-e the following new section:
\t21-I:30-f State Retiree Health Benefits Cost-Sharing Waiver.
\t\tI. A retired state employee receiving medical and surgical benefits under this subdivision may be granted a waiver by the commissioner for payment of any increases in premium contribution percentage, co-payments, deductibles, or other cost-sharing mechanisms. A waiver shall be effective on the date the waiver is issued to the state retiree.
\t\tII. To be eligible to apply for a waiver, a state retiree shall:
\t\t\t(a) Be receiving a retirement allowance under RSA 100-A that is less than 80 percent of
the mean New Hampshire per capita income as shown by the American Community Survey's 1-year Estimate (inflation adjusted), produced by the United States Census Bureau in the most recent year data is available; and
\t\t\t(b) Have at least 20 years of service as a state employee.
\t\tIII. An eligible state retiree may apply to the commissioner for a waiver under this section on a form prescribed by the commissioner in rules adopted under RSA 541-A. Such application shall require the applicant to provide the number of years of service with the state, his or her annual retirement allowance, and a disclosure form allowing the New Hampshire retirement system to provide the department of administrative services with verification of his or her eligibility.
\t\tIV. If a waiver is granted, the department shall exempt the retiree from payment of any future increases in premium contribution percentage, co-payments, deductibles, and any other employee cost sharing mechanisms over the amount of such cost sharing paid by the retiree prior to the date of the waiver. Retirees granted a waiver shall be grandfathered into the cost sharing structure of the plan as of the date of the issuing of the waiver. Nothing in this section shall prevent a retiree granted a waiver from having his or her costs for medical and surgical benefits under this subdivision decreased.
\t\tV. Every 2 years, beginning on July 1, 2019, the department of administrative services shall recalculate the retirement allowance needed for eligibility for the waiver, using the latest per capita income data for New Hampshire available from the United States Census Bureau. In the event the biennial recalculation of per capita income would disqualify a retiree who had already been granted a waiver, the wavier shall remain in effect for that retiree.
\t8 Appropriation and Charges; Department of Administrative Services; Risk Management; Health Plan Costs. In addition to any other sums appropriated, the sum of $700,000 is appropriated to the department of administrative services, risk management unit, for the biennium ending June 30, 2017 for state retiree health plan costs under RSA 21-I:30. Said appropriations shall be a charge against the following accounts:
Accounting Unit\t\tClass\tClass Name\t\t\t\tFY 2016\tFY 2017
01-14-14-1415-2950\t023\tHeat-Electricity-Water\t\t\t ($50,000)\t($100,000)
02-10-10-1000-1880\t049\tTransfer to Other State Agencies\t($180,000)\t($180,000)
02-46-46-4680-8250\t023\tHeat-Electricity-Water\t\t\t ($90,000)\t($100,000)
\t9 Contingent Appropriation; Department of Administrative Services; Retire Health Plan Costs. For the biennium ending June 30, 2017, in the event expenditures are greater than amounts appropriated to the department of administrative services for retiree health insurance under account 01-14-14-143510-2903, the commissioner of the department of administrative services may request, with prior approval of the fiscal committee of the general court and the governor and council, additional funding from available general funds. Such approved sum is hereby appropriated. The governor is authorized to draw a warrant for said sum out of any money in the treasury not otherwise appropriated.
\t10 New Paragraph; Legislative Budget Assistant; Fiscal Committee; Retiree Health Advisory Council. Amend RSA 14:30-a by inserting after paragraph VI the following new paragraph:
\t\tVII. The committee shall establish a retiree health advisory council as a subcommittee to the committee. The advisory council shall convene public meetings as needed to review options under consideration for changes to the retiree health plan if additional changes are needed after the new retiree health benefits plan is established. The advisory council shall also receive testimony from retirees and other interested members of the public.
\t11 Repeals; January 1, 2017. The following are repealed:
\t\tI. RSA 21-I:30, II(b), relative to continuation of premium contribution amounts for certain retired state employees and spouses who become Medicare eligible.
\t\tII. RSA 21-I:30, XIII(b), relative to continuation of premium contribution amounts for certain retired state employees and spouses not receiving a retirement allowance who become Medicare eligible.
\t\tIII. RSA 100-A:54, III(b), relative to continuation of premium contribution amounts for certain retired state employees and spouses receiving a retirement allowance who become Medicare eligible.
\t\tIV. RSA 100-C:11-a, II, relative to continuation of premium contribution amounts for certain retired judges and spouses who become Medicare eligible.
\t\tI. Section 11 of this act shall take effect January 1, 2017.
\t\tII. Section 7 of this act shall take effect July 1, 2017.
\t\tIII. The remainder of this act shall take effect upon its passage.
\t\t\t\t\t\t\t\t\t\t\t16-2201
\t\t\t\t\t\t\t\t\t\t\tAmended 4/1/16
HB 1591-FN-A- FISCAL NOTE
AN ACT\t(New Title) relative to the health care premium contribution for retired state employees who are eligible for Medicare Parts A and B due to age or disability, relative to funding of retiree health benefits, and making an appropriation to the department of administrative services.
FISCAL IMPACT:
The Department of Administrative Services and New Hampshire Retirement System, state this bill, as amended by the House (Amendment #2016-0889h), will increase state expenditures by approximately $67,500 in FY 2016 and $256,000 in FY 2017, will increase state restricted revenue by approximately $87,000 in FY 2017, and will have an indeterminable impact on state restricted revenue in FY 2018 and each year thereafter. There will be no fiscal impact to county and local expenditures and revenue.
This bill appropriates $20,000 in state general funds for the biennium ending June 30, 2017 to the Department of Administrative Services for the purposes of this act.
This bill appropriates $300,000 in state restricted funds for the biennium ending June 30, 2017 to the Department of Administrative Services for the purposes of this act.
METHODOLOGY:
The Department of Administrative Services states this bill requires retired employees and judges who become eligible for Medicare Parts A and B, due to age or disability, on or after July 1, 2016, to continue to pay the same premium contribution rate they paid before becoming Medicare eligible, through January 1, 2017. The current premium contribution rate is set at 17.5 percent; approved by the Fiscal Committee in November 2015 pursuant to RSA 100-A:54, III. The Department estimates this bill will increase state restricted revenue by approximately $87,000 in FY 2017. This estimate assumes there will be 221 non-Medicare eligible retirees who will become Medicare eligible in FY 2017 and pay the 17.5 percent ($65.42) premium contribution during the first six months of FY 2017 (221 * $65.42 * 6 = $86,747).
Beginning January 1, 2017, the Commissioner of Administrative Services shall determine, with prior approval of the Fiscal Committee, a premium contribution rate for the Medicare eligible retiree health plan and a premium contribution rate for the non-Medicare eligible retiree health plan. This provision allows the Department to establish variable rates for Medicare and non-Medicare retiree health plans. This bill removes the requirement that prohibits premium contribution rates from being lower than 12.5 percent. Depending on the rates that are determined and approved for the Medicare eligible and non-Medicare eligible retiree health plans, state restricted revenue could be impacted.
The Department of Administrative Services states this bill appropriates $20,000 of general funds for the biennium ending June 30, 2017 for overtime charges to the risk management unit. Additionally, this bill appropriates $300,000 from the employee and retiree risk management fund for the biennium ending June 30, 2017 to the Department to contract with a health care consultant to design a long-term funding plan for state retiree health benefits and to provide training to state retirees on the benefit plan and its funding. The Department estimates of the appropriated amounts, it will spend approximately $64,000 in FY 2016 and $256,000 in FY 2017 in effectuating the provisions of this bill.
The New Hampshire Retirement System states this bill requires it to deduct the health insurance premium contribution from the monthly retirement allowance of a retired state employees who become eligible for Medicare Parts A and B due to age or disability on or after July 1, 2016. The Retirement System estimates it will cost approximately $3,500 to modify the pension database software to accommodate the new requirement.