H-2394

AN ACT Relating to health care benefits for retired and disabled state, local government, and common school employees; amending RCW 41.05.080 and 41.05.080; creating new sections; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. (1) The legislature finds that premium rates for health care coverage currently offered by the state employees' benefits board to retired and disabled state employees are high, and consume an increasing proportion of the fixed income of such retired and disabled individuals. The legislature further finds that it is appropriate to continue to subsidize the high costs of health care coverage for retired and disabled public employees, but that the form and level of that subsidy, and mechanisms to fund and administer such health care coverage, must be determined after careful study.

(2) It is the purpose of this act to comprehensively address issues relating to health care coverage for retired and disabled state, local government, and public school employees by authorizing the health care authority to offer a medicare supplement health insurance plan to retired and disabled state employees on an interim basis, and establishing a study commission to develop recommendations to the legislature regarding health care benefits for retired and disabled state, local government and public school employees.

Sec. 2. RCW 41.05.080 and 1977 ex.s. c 136 s 6 are each amended to read as follows:

Retired or disabled state employees, or employees of county, municipal, or other political subdivisions covered by this chapter who are retired, may continue their participation in insurance plans and contracts after retirement or disablement, under the qualifications, terms, conditions, and benefits set by the board: PROVIDED, That the rates charged such retired or disabled employees for health care will be developed from the same experience pool as active employees: PROVIDED FURTHER, That ((~~such~~)) retired or disabled employees ((~~shall bear the full cost of premiums required to provide such coverage~~)) eligible for medicare may be offered health care coverage that differs from that available to active employees. The premium rate for such coverage shall be subsidized to the same extent as the premium rate for retired and disabled employees participating in health care coverage available to active employees. Such retired or disabled employees shall be responsible for payment of premium rates developed by the authority in accordance with this section: PROVIDED FURTHER, That such self pay rates will be established based on a separate rate for the employee, the spouse, and the children: PROVIDED FURTHER, That premium rates for a retired or disabled employee, spouse, or child who is eligible for and who elects to apply for medicare will be actuarially reduced to reflect the value of Part A and Part B of medicare. The term "retired state employees" for the purpose of this section shall include but not be limited to members of the legislature whether voluntarily or involuntarily leaving state office.

NEW SECTION. Sec. 3. (1) A retired and disabled state, local government, and public school employee health care benefits study commission is hereby established. The commission shall be composed of:

(a) Four legislators, one from each of the two largest caucuses in the senate and the house of representatives, who shall be selected by the president of the senate and the speaker of the house of representatives and who serve on the senate ways and means committee or the house of representatives appropriations committee;

(b) One member, to be selected by the governor, representing retired state employees;

(d) One member, to be selected by the governor, representing retired county, municipal or other local government employees covered by chapter 41.05 RCW;

(e) One member, to be selected by the governor, representing active state employees;

(f) One member, to be selected by the governor, representing active public school employees;

(g) One member, to be selected by the governor, representing active county, municipal, or other local government employees covered by chapter 41.05 RCW; and

(h) Three members to represent the governor and executive agencies.

The legislative members shall select a chair from the members of the commission. Except for members appointed under subsection (1)(b) through (h) of this section who participate in the commission as part of their regular employment, commission members shall be reimbursed for travel expenses pursuant to RCW 43.03.050 and RCW 43.03.060.

(2) The commission shall study and develop recommendations regarding health care coverage for retired and disabled state, local government, and public school employees. The study should include, but not be limited to, the following areas:

(a) Establishment of a mechanism to annually determine the level of subsidy of retired and disabled employee's health care coverage premium rates;

(b) Development of mechanisms to prefund health care coverage for retired and disabled employees, through means such as contributions by active employees to a fund established to finance future retired and disabled employees' health care benefits, and voluntary contributions by active employees to individual medical accounts from which funds can be drawn upon retirement or becoming disabled to pay premiums and cost-sharing for health care coverage;

(c) Establishment of variable health care coverage premium rates for retired or disabled employees based upon the individual retired or disabled individual's income;

(d) Health care coverage for retired or disabled public school employees;

(e) Health care coverage for retired or disabled employees of county, municipal or other local governments covered by chapter 41.05 RCW; and

(f) Any other areas deemed necessary by the commission.

The commission shall report its findings and recommendations to the legislature on or before December 1, 1992.

(3) The commission shall be staffed by the office of financial management and staff from the appropriate committees of the house of representatives and the senate. The health care authority, office of retirement systems, office of the actuary, and department of personnel shall provide support to the commission, to the extent possible, through the provision of technical expertise and data. The commission may form technical advisory committees to assist it with matters deemed necessary by the commission.

Sec. 4. RCW 41.05.080 and 1991 c ... s 2 (section 2 of this act) are each amended to read as follows:

Retired or disabled state employees, or employees of county, municipal, or other political subdivisions covered by this chapter who are retired, may continue their participation in insurance plans and contracts after retirement or disablement, under the qualifications, terms, conditions, and benefits set by the board: PROVIDED, That the rates charged such retired or disabled employees for health care will be developed from the same experience pool as active employees: PROVIDED FURTHER, That such retired or disabled employees ((eligible for medicare may be offered health care coverage that differs from that available to active employees. The premium rate for such coverage shall be subsidized to the same extent as the premium rate for retired and disabled employees participating in health care coverage available to active employees. Such retired or disabled employees shall be responsible for payment of premium rates developed by the authority in accordance with this section)) shall bear the full cost of premiums required to provide such coverage: PROVIDED FURTHER, That such self pay rates will be established based on a separate rate for the employee, the spouse, and the children: PROVIDED FURTHER, That ((~~premium~~)) rates for a retired or disabled employee, spouse, or child who is eligible for and who elects to apply for medicare will be actuarially reduced to reflect the value of Part A and Part B of medicare. The term "retired state employees" for the purpose of this section shall include but not be limited to members of the legislature whether voluntarily or involuntarily leaving state office.

NEW SECTION. Sec. 5. Section 4 of this act shall take effect July 1, 1993.