45th legislature - STATE OF NEW MEXICO - second session, 2002

RELATING TO PUBLIC EMPLOYEE BENEFITS; CHANGING THE CONTRIBUTIONS FROM PUBLIC FUNDS; AMENDING A SECTION OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 10-7-4 NMSA 1978 (being Laws 1941, Chapter 188, Section 1, as amended) is amended to read:

"10-7-4. GROUP INSURANCE--CAFETERIA PLAN--CONTRIBUTIONS FROM PUBLIC FUNDS.--

A. All state departments and institutions and all political subdivisions of the state, excluding municipalities, counties and political subdivisions of the state with twenty-five employees or fewer, shall cooperate in providing group term life, medical or disability income insurance for the benefit of eligible employees or salaried officers of the respective departments, institutions and subdivisions.

B. The group insurance contributions of the state [or any of its departments or institutions, including institutions of higher education] educational institutions and the public schools, shall be made as follows:

(1) seventy-five percent of the cost of the insurance of an employee whose annual salary is less than fifteen thousand dollars ($15,000);

(2) seventy percent of the cost of the insurance of an employee whose annual salary is fifteen thousand dollars ($15,000) or more but less than twenty thousand dollars ($20,000);

(3) sixty-five percent of the cost of the insurance of an employee whose annual salary is twenty thousand dollars ($20,000) or more but less than twenty-five thousand dollars ($25,000); or

(4) sixty percent of the cost of the insurance of an employee whose annual salary is twenty-five thousand dollars ($25,000) or more.

As used in this subsection, "cost of the insurance" means the premium required to be paid to provide coverages. Any contributions of the political subdivisions of the state, except the public schools and political subdivisions of the state with twenty-five employees or fewer, shall not exceed sixty percent of the cost of the insurance.

C. The group insurance contributions of state departments or agencies in the executive, legislative or judicial branches shall be as determined initially by legislative appropriation at:

(1) a fixed dollar amount for employees whose annual salary is twenty thousand dollars ($20,000) or more; and

(2) a higher fixed dollar amount for employees whose annual salary is less than twenty thousand dollars ($20,000). Annual inflation adjustments shall not be less than the increase in the consumer price index for the state contribution. The target is to retain the same percentage of state contribution for both salary levels as the initial appropriation.

[C.] D. When a public employee elects to participate in a cafeteria plan as authorized by the Cafeteria Plan Act and enters into a salary reduction agreement with the governmental employer, the provision of Subsection B of this section with respect to the maximum contributions that can be made by the employer are not violated and will still apply. The employer percentage or dollar contributions as provided in Subsections B and C of this section shall be determined by the employee's gross salary prior to any salary reduction agreement.

[D.] E. Any group medical insurance plan offered pursuant to this section shall include effective cost-containment measures to control the growth of health care costs. The responsible public body that administers a plan offered pursuant to this section shall report annually by September 1 to appropriate interim legislative committees on the effectiveness of the cost-containment measures required by this subsection."

Section 2. APPLICABILITY.--The provisions of this act apply to pay periods beginning on or after July 1, 2002.

Section 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2002.

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