Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Ways & Means Committee

HB 1601

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Bill

Permits members of the Public Employees' Retirement System (PERS), the Teachers' Retirement System (TRS), and the School Employees' Retirement System (SERS) Plans 2 to elect continued coverage under the state's employee health benefits upon leaving service whether or not they retire and immediately begin pension benefits.
Limits eligibility to PERS, TRS, and SERS Plan 2 members that separate from service, are at least 55 years of age, and have earned at least 20 years of retirement plan service credit.

Background:

The state Health Care Authority (HCA), through the Public Employee Benefits Board (PEBB), provides medical benefits for retired employees of the state and participating local governments. The PEBB coverage is also available to retired employees of the state, school districts, and those local governments that purchase active employee benefits through the HCA. The Legislature provides a subsidy for Medicare-eligible retirees that enroll in PEBB plans.

Members of Plan 3 of the Public Employees' Retirement System (PERS), the Teachers' Retirement System (TRS), and the School Employees' Retirement System (SERS) may elect to retain their state employee health insurance upon separation from state employment, regardless of whether they choose to retire from their plan and collect benefits at that time. In order to be eligible for continued coverage, a separated employee must have at least 10 years of service and be at least 55 years of age. Members of Plan 3 are first eligible to begin early retirement benefits at age 55 with at least 10 years of service. Separated employees choosing to retain coverage are required to pay the full cost of their insurance premiums.

Members of Plan 2 of PERS, TRS, and SERS may choose to retain employee health insurance coverage when they separate from service only if they also retire at that time and begin to collect their pension benefits at that time. Retiring Plan 2 members electing continued coverage must pay the full cost of their insurance premiums. Members of Plan 2 are first eligible to begin early retirement benefits at age 55 with at least 20 years of service.

Summary of Bill:

Members of PERS, TRS, and SERS Plan 2 may elect continued coverage under the state's employee health benefits when they leave service whether or not they retire and begin to collect pension benefits at that time. In order to be eligible for continued coverage without collecting a retirement allowance, separating members must be at least 55 years old and have at least 20 years of service credit.