KRS § 161.675 — KY Code / Title XIII / Chapter 161 / Section 161.675
161.675 Hospital and medical benefits and health insurance coverage for eligible recipients of retirement allowances from Teachers' Retirement System -- Applicability to individuals becoming members on or after July 1, 2008 -- Health insurance supplement payments -- Coverage for spouses, dependents, and disabled children of retirees -- Exemption from premium tax
Status: in_force

161.675 Hospital and medical benefits and health insurance coverage for eligible

recipients of retirement allowances from Teachers' Retirement System --

Applicability to individuals becoming members on or after July 1, 2008 --

Health insurance supplement payments -- Coverage for spouses, dependents,

and disabled children of retirees -- Exemption from premium tax.

(1) The board of trustees shall arrange by appropriate contract or on a self-insured basis

to provide a broad program of group hospital and medical insurance for present and

future eligible recipients of a retirement allowance from the Teachers' Retirement

System. The board of trustees may also arrange to provide health insurance

coverage through an insurer licensed pursuant to Subtitle 38 of KRS Chapter 304

and offering a managed care plan as defined in KRS 304.17A-500 as an alternative

to group hospital and medical insurance for persons eligible for hospital and

medical benefits under this section. The board of trustees may authorize eligible

recipients of a retirement allowance from the Teachers' Retirement System who are

less than age sixty-five (65) to be included in the state-sponsored health insurance

that is provided to active teachers and state employees under KRS 18A.225.

Members who are sixty-five (65) or older and retired for service shall not be

eligible to participate in the state employee health insurance program as described

in KRS 18A.225.

(2) (a) The coverage provided shall be as set forth in the contracts and the

administrative regulations of the board of trustees. The board of trustees may

change the levels of coverage and eligibility conditions to meet the changing

needs of the annuitants and, when necessary, to contain the expenses of the

insurance program within the funds available to finance the insurance

program, except as provided by paragraph (b) of this subsection. The

contracts and administrative regulations shall provide for but not be limited to

hospital room and board, surgical procedures, doctors' care in the hospital,

and miscellaneous hospital costs. An annuitant whose effective date of

retirement is July 1, 1974, and thereafter, must have a minimum of five (5)

years' creditable Kentucky service in the Teachers' Retirement System or five

(5) years of combined creditable service in the state-administered retirement

systems if the member is retiring under the reciprocity provisions of KRS

61.680, 61.702, and 78.5536. An annuitant shall not elect coverage through

more than one (1) of the state-administered retirement systems. The board of

trustees shall offer coverage to the disabled child of an annuitant regardless of

the disabled child's age if the annuitant pays the entire premium for the

disabled child's coverage. A child shall be considered disabled if he or she has

been determined to be eligible for federal Social Security disability benefits.

(b) Individuals who become members of the Kentucky Teachers' Retirement

System on or after July 1, 2008, shall not be eligible for benefits under this

section unless the member has at least fifteen (15) or more years of service

credited under KRS 161.500 or another state-administered retirement system.

(3) All expenses for benefits under this section shall be paid from the funding

provisions contained in KRS 161.420(5), from a trust fund established by the board

under 26 U.S.C. sec. 115, premium charges received from the annuitants and the

spouses, and from funds that may be appropriated or allocated by statute.

(4) (a) The board of trustees shall determine the amount of health insurance

supplement payments that the Teachers' Retirement System will provide to

assist eligible annuitants in paying the cost of their health insurance, based on

the funds available in the medical insurance fund and any trust fund

established by the board for this purpose under 26 U.S.C. sec. 115. The board

of trustees shall establish the maximum monthly amounts of health insurance

supplement payments that will be made by the Kentucky Teachers'

Retirement System for eligible annuitants. The board of trustees shall

annually establish the percentage of the maximum monthly health insurance

supplement payment that will be made, based on age and years of service

credit of eligible recipients of a retirement allowance. Monthly health

insurance supplement payments made by the retirement system may not

exceed the amount of the single coverage insurance premium chosen by the

eligible annuitants. In order to qualify for health insurance supplements, the

annuitant must agree to pay the difference between the insurance premium

and the applicable supplement payment, by payroll deduction from his or her

retirement allowance, or by a payment method approved by the retirement

system.

(b) 1. The board shall, effective July 1, 2010, have the authority to charge

retired members who are not paying the Standard Medicare Part B

premium an amount equal to the Standard Medicare Part B premium in

addition to any other payments determined by the board to be necessary

to contain costs within the available funding. If the board determines

that retired members who are not paying the Standard Medicare Part B

premium should pay the equivalent of the Standard Medicare Part B

premium, the board shall phase in the premium according to the

following schedule:

July 1, 2010............. ....................................... Thirty-three percent (33%)

July 1, 2011........ ............................................. Sixty-seven percent (67%)

July 1, 2012, and thereafter ......................... One hundred percent (100%)

2. If the board requires retired members to pay the charges specified in

subparagraph 1. of this paragraph, the amount payable shall not be

reduced by the board until the funds established to actuarially fund

pension annuities and the medical insurance fund established under KRS

161.420 each achieve an actuarial funding level of at least one hundred

percent (100%).

3. Nothing in this paragraph shall limit the board's authority to change the

levels of coverage, eligibility conditions, or levels of health insurance

supplement for retirees in order to contain costs within available

funding.

(c) The board of trustees may offer, on a full-cost basis, health care insurance

coverage provided by the retirement system to spouses and dependents of

eligible annuitants not otherwise eligible for regular coverage. Recipients of a

retirement allowance from the retirement system must agree to pay the cost of

this coverage by payroll deduction from their retirement allowance or by a

payment method approved by the retirement system.

(d) The board of trustees shall offer, on a full-cost basis, health insurance

coverage provided by the retirement system to the disabled child of an

annuitant, regardless of the age of the disabled child. A child shall be

considered disabled for purposes of this section if the child has been

determined to be eligible for federal Social Security disability benefits.

(5) The board of trustees is empowered to require the annuitant and the annuitant's

spouse to pay a premium charge to assist in the financing of the hospital and

medical insurance program. The board of trustees is empowered to pay the

expenses for insurance coverage from the medical insurance fund, from any trust

fund established by the board for this purpose under 26 U.S.C. sec. 115, from the

premium charges received from the annuitants and the spouses, and from funds that

may be appropriated or allocated by statute. The board may provide insurance

coverage by making payment to insurance carriers including health insurance plans

that are available to active and retired state employees and active teachers,

institutions, and individuals for services performed, or the board of trustees may

elect to provide insurance on a "self-insurance" basis or a combination of these

provisions.

(6) The board of trustees may approve health insurance supplement payments to

eligible annuitants who are less than sixty-five (65) years of age, as reimbursement

for hospital and medical insurance premiums made by annuitants for their

individual coverage. Eligible annuitants or recipients are those annuitants who are

not eligible for Medicare and who do not reside in Kentucky or in an area outside of

Kentucky where comparable coverage is available. The reimbursement payments

shall not exceed the minimum supplement payment that would have been made had

the annuitant lived in Kentucky. Eligible annuitants or recipients shall submit proof

of payment to the retirement system for hospital and medical insurance that they

have obtained. Reimbursement payments shall be made on a quarterly basis.

(7) Contracts negotiated may include the provision that a stated amount of hospital cost

or period of hospitalization shall incur no obligation on the part of the insurance

carrier or the retirement system or any trust fund established for this purpose by the

board.

(8) The board of trustees is empowered to promulgate administrative regulations to

assure efficient operation of the hospital and medical insurance program.

(9) Premiums paid for hospital and medical insurance coverage procured under

authority of this section shall be exempt from any premium tax which might

otherwise be required under KRS Chapter 136. The payment of premiums by the

medical insurance fund or another trust fund established by the board for this

purpose shall not constitute taxable income to an insured recipient.

(10) In the event that a member is providing services on less than a full-time basis under

KRS 161.605, the retirement system may pay the full cost of the member's health

insurance coverage for the full fiscal year that the member is providing those

services, at the conclusion of which, the retirement system may then bill the active

employer and the active employer shall reimburse the retirement system for the cost

of the health insurance coverage incurred by the retirement system on a pro rata

basis for the time that the member was employed by the active employer.