An Act To Implement Task Force Recommendations Relating to Parity and Portability of Benefits for Law Enforcement Officers and Firefighters
Maine Legislature, Session 122, LD 1021
Committee: Labor
Amends: 36 MRSA §2513-C, 5 MRSA §17656, 5 MRSA §18253

Legislative Document 
No. 1021 
H.P.706 
House of Representatives, March 1,2005 
An Act To Implement Task Force Recommendations Relating to 
Parity and Portability of Benefits for Law Enforcement Officers and 
Firefighters 
Reported by Representative DUPLESSIE of Westbrook for the Task Force to Study Parity 
and Portability of Retirement Benefits for State Law Enforcement Officers, Municipal and 
County Law Enforcement Officers and Firefighters pursuant to Resolve 2003, chapter 76. 
Reference to the Committee on Labor suggested and ordered printed under Joint Rule 218 . 
Primed on recycled papel 
7I/~ 
/J7.71ld£~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 5 MRSA c. 13, sub-c. 3 is enacted to read: 
SUBCHAPTER 3 
HEALTH INSURANCE SUBSIDY FOR RETIRED LAW ENFORCEMENT 
OFFICERS AND FIREFIGHTERS 
§286-M. 
Subsidy 
1. 
Eligibility. 
The State shall pay a subsidy toward the 
cost of health insurance for eligible retired law enforcement 
officers 
and 
firefighters. 
A 
law 
enforcement 
officer 
or 
firefighter is eligible for the subsidy if that person is: 
A. 
Retired from a position a~a county or municipal law 
enforcement officer or municipal firefighter; and 
B. 
Receiving 
a 
retirement benefit 
from 
a 
special 
pla~ 
administered by the Maine State Retirement System, as long 
as that plan allows for retirement after no more than 25 
years of service, with a benefit of at least 50% of average 
final compensation, with no reduction for early retirement 
and with a cost-of-living adjustment, or from a special plan 
that does not provide a cost-of-living adjustment but that 
requires fewer than 25 years of service to retire or that 
provides 
a 
benefit 
of 
more 
than 
50% 
of 
average 
final 
compensation after 25 years of service. 
2. 
Health insurance coverage; amount of subsidy. 
Subject 
to the limitations provided in this subsection, the State shall 
pay 100'1-0 of the retiree portion of the health insurance premium 
for eligible law enforcement officers and firefighters. 
A. 
If the retiree is eligible to participate in the health 
insurance plan of the retiree's former employer, the subsidy 
is based on the retiree portion of premium for that plan. 
If the retiree is not eligible to participate in the former 
employer's plan, the subsidy is based on the premium paid by 
the retiree for a comparable health insurance policy. 
B. 
The subsidy paid under this section for an individual 
retiree may not exceed: 
Page l-LR0263 (1) 
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(1) 
If the retiree is eligible for Medicare, the cost 
of the Medicare supplement policy provided to state 
retirees pursuant to subchapter 2; 
or 
12~ If the 
reti~e-.!L.i$ not eligible for Medicare~ne 
cost of the health insurance coverage for active state 
employees pursuant to subchapter 2. 
3. 
AQlqiAi.Jil:sati_(t~_. _Th_~~pj;l~_tme~t of Administrative and 
Financial Services 
shall admjnister the payment of subsidies 
under subsection 2. 
The department shall attempt to enter into 
agreements with health insurance providers to bill the department 
directly for premiums. 
If the department is unable to form such 
agreements, the depart~ent shall pay the subsidy as reimbursement 
to retirees after the retirees have paid the premium . 
§286-N. 
Fund 
1. 
Fund 
created: 
revenue 
sources. 
The 
Retired 
Law 
Enforcement Officer and Firefighter Health Insurance Dedicated 
Revenue Fund, referred to in the subchapter as "the fund," is 
established in the Department of Administrative and Financial 
Services as a 
nonlapsing, dedicated account. The fund consists 
of: 
.12 
A. 
Employee 
contributions collected pursuant to section 
286-0; 
B. 
1;'axes~II~£!_tJ~c;l 
on 
certain 
property 
and 
casualli 
insurance premiums pursuant to Title 36, section 2513-C; 
c. 
Interest earned on investments of the fund; 
and 
D. 
Any other private or public funds contributed to the 
fund. 
2. 
Uses. 
The fund must be used to pay the subsidy provided 
for in section 286-M for implementation costs for that subsidy, 
and for no other purpose. 
§286-0. 
Employee contributions to fund 
A contribution of 1. 5°'0 of compensation must be paid to the 
fund by each law enforcement officer and each firefighter who 
pj;lJticipates as an active employee in a Maine State Retirement 
4(j 
System plan described in section 286-M, subsection L 
paragraph 
B. 
The employer of the officer or firefighter shall remit the 
contribution to the fund. 
The fund is a 
pooled account and 
individual officers and (i.r.efighters do not have a right to funds 
SO 
deposited in the fund, except as provided in section 286 M. 
§286-P. 
Report and review of funding 
The 
Department 
of 
Administrative 
and 
Financial 
Services 
shall submit a report to the First Regular Session of the 125th 
Legislature on revenue to the fund, expenditures from the fund, 
any balance remaining in the fund as of the close of the pr ior 
fiscal year and a projection of funding needs for the next 5 
years. 
The report must provide options, based on projections of 
future need, 
for changing tne method of funding the subsidy, 
which may include an increase, elimination or decrease of the 
premium 
tax 
rate 
under 
Title 
36, 
section 
2513-C, 
employee 
contributions or both. 
Sec. A-2. 36 MRSA §2513-C is enacted to read: 
§25l3-C. 
Additional tax on p~mium 
1. 
Tax impose.d. 
In addition to 
2513, 
a 
tax of 
.50% is imposed on 
contracts written or risks located or 
the following types of insurance: 
the tax imposed in section 
gross direct premiums 
on 
resident in the State for 
A. 
Private passenger car liability or physical damage; 
B. 
Commercial auto liability, no-fault or physical damage; 
C. 
Homeowners multiple peril; 
D. 
Commercial or farm owners multiple peril: 
E. 
Allied lines; 
F. 
Inland marine: 
G. 
Aircraft multi~erilL 
H. 
Boiler and machinery; 
1. 
Fire: 
J. 
Burglary and theft; 
K. 
Ocean marine; and 
L. 
Other liability insurance. 
2. 
Collection anLQ~osit of tax. 
The State Tax Assessor 
shall collect the tax imposed by this section and shall deposit 
receipts in the Retired Law Enforcement Officer and Firefighter 
". 
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B 
.10 
.16 
• 
'.12 
')0 
Health 
Insurance Dedicated Revenue 
Fund created in Title 
5, 
section 286-N. 
3. 
Applicabj.lity of this section. 
The tax imposed under 
this section is imposed on premiums following the same credits 
and deductions as allowed for the tax imposed in section 2513. 
For 
purposes 
of 
collection 
and 
enforcement. 
this 
tax 
is 
considered a part of the tax collected under section 2513. 
Sec. A-3. 
Report. 
The 
Department 
of 
Administrative 
and 
Financial Services, Bureau of Insurance shall submit a report to 
the Second Regular Session of the l22nd Legislature setting forth 
various methods of collecting equitable amounts of contributions 
toward the cost of retiree health insurance from businesses that 
do not purchase the types of insurance contracts listed under the 
Maine Revised Statutes, Title 36, section 2513-C, subsection 1. 
The bureau shall submit the report not later than December 1, 
2005. 
The 
report must include 
a 
description of examples of 
noninsured entities assessed for certain costs on a basis other 
than 
insurance 
premiums: 
for 
example, 
under 
the 
workers' 
compensation law. 
PARTB 
Sec. B-1. 5 MRSA §17656. sub-§l. ~D is enacted to read: 
D. 
If the plan from which the member is transferring and 
the plan to which the member is transferring are both plans 
described in Title 5, section 286-M, subsection 1, paragraph 
B, the member may elect to make the contribution necessary 
to include all or part of the member' s creditable service 
and earnable compensation from the prior plan in the new 
plan. 
The retirement system shall establish procedures for 
determining the contribution necessary for such a member to 
carry forward all or part of the creditable service and 
earnable compensation from a prior plan or plans. 
Sec. B-2. 5 MRSA §18253. sub-§l. ~E is enacted to read: 
E. If the plan from which the member is transferring and the 
plan to which the member is transferring are both plans 
described in Title 5, section 286-M, subsection I. paragraph 
B, the member may elect to make the contribution necessary 
to include all or part of the member' s creditable service 
and earnable com..,pensation from the prior plan in the new 
plan. 
The retirement system shall establish procedures for 
determining the contribution necessary for such a member to 
carry forward all or part of the creditable service and 
earnable compensation from a prior plan or plans. 
SUMMARY 
This bill is the unanimous recommendation of the Task Force 
to Study Parity and Portability of Retirement Benefits for State 
Law Enforcement Officers, Municipal and County Law Enforcement 
Officers and Firefighters. 
Part A creates 
a state subsidy for the cost of retiree 
health 
insurance 
for 
municipal 
and 
county 
law 
enforcement 
officers and firefighters who retire from certain Maine State 
Retirement System retirement plans. 
To pay for the subsidy, the 
bill creates a dedicated account funded from 2 sources: 
a 0.50% 
premium tax on certain types of property and casualty insurance 
policies, 
including 
homeowners 
insurance 
and 
commercial 
and 
personal 
car 
insurance, 
and 
a 
contribution 
of 
1.5°" 
of 
compensation from active municipal 
and county law enforcement 
officers and firefighters who participate in certain retirement 
plans 
and 
are 
likely 
to 
be 
eligible 
for 
the 
subsidy 
upon 
retirement. 
Officers 
and 
firefighters 
are 
eligible 
for 
the 
subsidy only if they have retired from a Maine State Retirement 
System retirement plan that provides for retirement after 
years of service, with a benefit of at least 50% of average final 
compensation and a cost-of-living adjustment, or a better Maine 
State Retirement System retirement plan. 
The bill requires the 
Department of Administrative and Financial Services to report on 
revenue and funding of the subsidy to the Legislature in 2011. 
It also requires the Bureau of Insurance in the Department of 
Professional and Financial Regulation to submit a report to the 
options 
for 
collecting contributions 
toward 
the 
cost of 
the 
retiree health insurance from businesses that do not purchase 
insurance for the types of property and casualty risks described 
in the bill. 
Part B allows state, county and municipal law enforcement 
officers 
and 
firefighters 
who 
change 
employers 
to 
purchase 
portability of their retirement benefits, if they are changing 
retirement plans and the plan to which they are moving does not 
provide portability. 
Portability would allow a person to count 
all or a portion of years of service from an earlier retirement 
plan when calculating a benefit or meeting the years-of-service 
requirement in a later retirement plan, and to count compensation 
from 
all 
years 
of 
service 
in 
determining 
average 
final 
compensation, 
one of the factors 
in calculating a 
retirement 
benefit. 
This provision would apply only to persons moving among 
the 
types 
of 
Maine 
State Retirement 
System 
retirement plans 
described above. 
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