0001| HOUSE BILL 435
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0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998
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0003| INTRODUCED BY
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0004| JERRY W. SANDEL
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0005|
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0006|
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0007|
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0008|
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0009|
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0010| AN ACT
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0011| RELATING TO RETIREE HEALTH CARE; AMENDING THE RETIREE HEALTH
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0012| CARE ACT TO CHANGE CERTAIN DEFINITIONS AND GIVE THE BOARD OF
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0013| THE RETIREE HEALTH CARE AUTHORITY MORE DISCRETION IN SETTING
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0014| CONTRIBUTION LEVELS; AMENDING SECTIONS OF THE NMSA 1978.
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0015|
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0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017| Section 1. Section 10-7C-4 NMSA 1978 (being Laws 1990,
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0018| Chapter 6, Section 4, as amended) is amended to read:
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0019| "10-7C-4. DEFINITIONS.--As used in the Retiree Health
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0020| Care Act:
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0021| A. "active employee" means an employee of a public
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0022| institution or any other public employer participating in
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0023| either the Educational Retirement Act, the Public Employees
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0024| Retirement Act, the Judicial Retirement Act [or], the
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0025| Magistrate Retirement Act or the Public Employees Retirement
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0001| Reciprocity Act or an employee of an independent public
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0002| employer;
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0003| B. "authority" means the retiree health care
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0004| authority created pursuant to the Retiree Health Care Act;
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0005| C. "basic plan of benefits" means only those
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0006| coverages generally associated with a medical plan of
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0007| benefits;
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0008| D. "board" means the [governing] board of the
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0009| retiree health care authority;
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0010| E. "current retiree" means an eligible retiree who
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0011| is receiving a disability or normal retirement benefit under
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0012| the Educational Retirement Act, the Public Employees
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0013| Retirement Act, the Judicial Retirement Act, the Magistrate
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0014| Retirement Act [the Retirement Reciprocity Act, the Judicial
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Retirement Reciprocity Act], the Public Employees Retirement
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0016| Reciprocity Act or the retirement program of an independent
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0017| public employer on or before July 1, 1990;
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0018| F. "eligible dependent" means a person obtaining
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0019| retiree health care coverage based upon that person's
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0020| relationship to an eligible retiree as follows:
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0021| (1) a spouse;
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0022| (2) an unmarried child under the age of
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0023| nineteen who is:
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0024| (a) a natural child;
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0025| (b) a legally adopted child;
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0001| (c) a stepchild living in the same
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0002| household who is primarily dependent on the eligible retiree
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0003| for maintenance and support;
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0004| (d) a child for whom the eligible
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0005| retiree is the legal guardian and who is primarily dependent
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0006| on the eligible retiree for maintenance and support, as long
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0007| as evidence of the guardianship is evidenced in a court order
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0008| or decree; or
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0009| (e) a foster child living in the same
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0010| household;
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0011| (3) a child described in Subparagraphs (a)
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0012| through (e) of Paragraph (2) of this subsection who is between
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0013| the ages of nineteen and twenty-five and is a full-time
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0014| student at an accredited educational institution, provided
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0015| that "full-time student" shall be a student enrolled in and
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0016| taking twelve or more semester hours or its equivalent contact
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0017| hours in primary, secondary, undergraduate or vocational
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0018| school or a student enrolled in and taking nine or more
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0019| semester hours or its equivalent contact hours in graduate
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0020| school;
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0021| (4) a dependent child over nineteen who is
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0022| wholly dependent on the eligible retiree for maintenance and
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0023| support and who is incapable of self-sustaining employment by
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0024| reason of mental retardation or physical handicap; provided
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0025| that proof of incapacity and dependency shall be provided
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0001| within thirty-one days after the child reaches the limiting
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0002| age and at such times thereafter as may be required by the
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0003| board;
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0004| (5) a surviving spouse defined as follows:
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0005| (a) "surviving spouse" means the spouse
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0006| to whom a retiree was married at the time of death; or
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0007| (b) "surviving spouse" means the spouse
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0008| to whom a deceased vested active employee was married at the
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0009| time of death; or
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0010| (6) a surviving dependent child who is the
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0011| dependent child of a deceased eligible retiree whose other
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0012| parent is also deceased;
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0013| G. "eligible employer" means either:
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0014| (1) a "retirement system employer", which
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0015| means an institution of higher education, a school district or
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0016| other entity participating in the public school insurance
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0017| authority, a state agency, state court, magistrate court,
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0018| municipality or county, each of which is affiliated under or
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0019| covered by the Educational Retirement Act, the Public
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0020| Employees Retirement Act, the Judicial Retirement Act [or],
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0021| the Magistrate Retirement Act or the Public Employees
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0022| Retirement Reciprocity Act; or
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0023| (2) an "independent public employer", which
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0024| means a municipality or county [which] that is not a
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0025| retirement system employer;
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0001| H. "eligible retiree" means:
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0002| (1) a "nonsalaried eligible participating
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0003| entity governing authority member" who is a person who is not
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0004| a retiree and who:
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0005| (a) has served without salary as a
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0006| member of the governing authority of an employer eligible to
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0007| participate in the benefits of the Retiree Health Care Act and
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0008| is certified to be such by the executive director of the
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0009| public school insurance authority;
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0010| (b) has maintained group health
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0011| insurance coverage through that member's governing authority
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0012| if such group health insurance coverage was available and
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0013| offered to the member during the member's service as a member
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0014| of the governing authority; and
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0015| (c) was participating in the group
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0016| health insurance program under the Retiree Health Care Act
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0017| prior to July 1, 1993; or
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0018| (d) if a person eligible under
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0019| Subparagraph (a) of this paragraph applies before August 1,
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0020| 1993 to the authority to participate in the program, then he
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0021| will be eligible to participate notwithstanding the provisions
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0022| of Subparagraphs (b) and (c) of this paragraph;
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0023| (2) a "salaried eligible participating entity
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0024| governing authority member" who is a person who is not a
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0025| retiree and who:
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0001| (a) has served with salary as a member
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0002| of the governing authority of an employer eligible to
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0003| participate in the benefits of the Retiree Health Care Act;
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0004| (b) has maintained group health
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0005| insurance through that member's governing authority, if such
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0006| group health insurance was available and offered to the member
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0007| during the member's service as a member of the governing
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0008| authority; and
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0009| (c) was participating in the group
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0010| health insurance program under the Retiree Health Care Act
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0011| prior to July 1, 1993; or
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0012| (d) if a person eligible under
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0013| Subparagraph (a) of this paragraph applies before August 1,
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0014| 1993 to the authority to participate in the program, then he
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0015| will be eligible to participate notwithstanding the provisions
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0016| of Subparagraphs (b) and (c) of this paragraph; or
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0017| (3) an "eligible participating retiree" who
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0018| is a person who:
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0019| (a) falls within the definition of a
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0020| retiree, has made contributions to the fund for at least five
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0021| years prior to retirement and whose eligible employer during
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0022| that period of time made contributions as a participant in the
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0023| Retiree Health Care Act on the person's behalf, unless that
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0024| person retires on or before July 1, 1995, in which event the
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0025| time period required for employee and employer contributions
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0001| shall become the period of time between July 1, 1990 and the
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0002| date of retirement, and who is certified to be a retiree by
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0003| the educational retirement director, the executive secretary
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0004| of the public employees retirement board or the governing
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0005| authority of an independent public employer;
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0006| (b) falls within the definition of a
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0007| retiree, retired prior to July 1, 1990 and is certified to be
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0008| a retiree by the educational retirement director, the
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0009| executive secretary of the public employees retirement
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0010| association or the governing authority or of an independent
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0011| public employer; but this paragraph does not include a retiree
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0012| who was an employee of an eligible employer who exercised the
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0013| option not to be a participating employer pursuant to the
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0014| Retiree Health Care Act and did not after January 1, 1993
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0015| elect to become a participating employer; unless the retiree:
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0016| 1) retired on or before June 30, 1990; and 2) at the time of
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0017| retirement did not have a retirement health plan or retirement
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0018| health insurance coverage available from his employer; or
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0019| (c) is a retiree who: 1) was at the
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0020| time of retirement an employee of an eligible employer who
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0021| exercised the option not to be a participating employer
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0022| pursuant to the Retiree Health Care Act, but which eligible
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0023| employer subsequently elected after January 1, 1993 to become
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0024| a participating employer; 2) has made contributions to the
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0025| fund for at least five years prior to retirement and whose
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0001| eligible employer during that period of time made
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0002| contributions as a participant in the Retiree Health Care Act
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0003| on the person's behalf, unless that person retires less than
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0004| five years after the date participation begins, in which event
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0005| the time period required for employee and employer
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0006| contributions shall become the period of time between the date
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0007| participation begins and the date of retirement; and 3) is
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0008| certified to be a retiree by the educational retirement
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0009| director, the executive secretary of the public employees
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0010| retirement board or the governing authority of an independent
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0011| public employer;
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0012| I. "fund" means the retiree health care fund;
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0013| J. "group health insurance" means coverage that
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0014| includes but is not limited to life insurance, accidental
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0015| death and dismemberment, hospital care and benefits, surgical
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0016| care and treatment, medical care and treatment, dental care,
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0017| eye care, obstetrical benefits, prescribed drugs, medicines
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0018| and prosthetic devices, medicare supplement, medicare
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0019| carveout, medicare coordination and other benefits, supplies
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0020| and services through the vehicles of indemnity coverages,
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0021| health maintenance organizations, preferred provider
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0022| organizations and other health care delivery systems as
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0023| provided by the Retiree Health Care Act and other coverages
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0024| considered by the board to be advisable;
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0025| K. "ineligible dependents" include but are not
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0001| limited to:
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0002| (1) those dependents created by common law
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0003| relationships;
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0004| (2) dependents while in active military
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0005| service;
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0006| (3) parents, aunts, uncles, brothers,
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0007| sisters, grandchildren and other family members left in the
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0008| care of an eligible retiree without evidence of legal
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0009| guardianship; and
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0010| (4) anyone not specifically referred to as an
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0011| eligible dependent pursuant to the rules and regulations
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0012| adopted by the board;
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0013| L. "participating employee" means an employee of a
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0014| participating employer, which employee has not been excluded
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0015| from participation in the Retiree Health Care Act pursuant to
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0016| Subsection F of Section 10-7C-9 NMSA 1978 or Section
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0017| 10-7C-10 NMSA 1978;
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0018| M. "participating employer" means an eligible
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0019| employer who has satisfied the conditions for participating in
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0020| the benefits of the Retiree Health Care Act, including the
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0021| requirements of Subsection M of Section 10-7C-7 NMSA 1978 and
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0022| Subsection D or E of Section 10-7C-9 NMSA 1978, as applicable;
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0023| and
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0024| N. "retiree" means a person who:
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0025| (1) is receiving:
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0001| (a) a disability or normal retirement
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0002| benefit or survivor's benefit under the Educational Retirement
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0003| Act;
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0004| (b) a disability or normal retirement
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0005| benefit or survivor's benefit pursuant to the Public Employees
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0006| Retirement Act, the Judicial Retirement Act, the Magistrate
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0007| Retirement Act [the Retirement Reciprocity Act or the
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Judicial Retirement Reciprocity Act] or the Public Employees
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0009| Retirement Reciprocity Act; or
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0010| (c) a disability or normal retirement
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0011| benefit or survivor's benefit pursuant to the retirement
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0012| program of an independent public employer to which that
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0013| employer has made periodic contributions; or
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0014| (2) is not receiving a survivor's benefit but
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0015| is the eligible dependent of a person who received a
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0016| disability or normal retirement benefit pursuant to the
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0017| Educational Retirement Act [or], the Public Employees
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0018| Retirement Act, the Judicial Retirement Act, the Magistrate
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0019| Retirement Act or the Public Employees Retirement Reciprocity
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0020| Act."
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0021| Section 2. Section 10-7C-7 NMSA 1978 (being Laws 1990,
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0022| Chapter 6, Section 7, as amended) is amended to read:
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0023| "10-7C-7. BOARD--DUTIES.--In order to achieve the
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0024| purposes of the Retiree Health Care Act, the board may take
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0025| all actions reasonably necessary to implement that act,
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0001| including but not limited to the following:
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0002| A. employ or contract for the services of the
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0003| state fiscal agent or select its own fiscal agent in
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0004| accordance with the Procurement Code;
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0005| B. employ or contract for persons to assist it in
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0006| carrying out the Retiree Health Care Act and determine the
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0007| duties and compensation of these employees;
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0008| C. collect and disburse funds;
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0009| D. collect all current and historical claims and
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0010| financial information necessary for effective procurement of
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0011| lines of insurance coverage;
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0012| E. promulgate and adopt necessary rules,
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0013| regulations and procedures for implementation of the Retiree
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0014| Health Care Act;
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0015| F. negotiate insurance policies covering
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0016| additional or lesser benefits as determined appropriate by the
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0017| board, but the board shall maintain all coverage as required
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0018| by federal or state law for each eligible retiree. In the
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0019| event it is practical to wholly self-insure part or all of the
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0020| retiree health care coverages, the board may do so;
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0021| G. procure group health care and other coverages
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0022| authorized by the Retiree Health Care Act in accordance with
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0023| the Procurement Code and the Health Care Purchasing Act;
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0024| H. establish the procedures for contributions and
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0025| deductions;
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0001| I. determine methods and procedures for claims
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0002| administration;
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0003| J. administer the fund;
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0004| K. contract for and make available to all eligible
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0005| retirees and eligible dependents basic and optional group
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0006| health insurance plans. The optional coverage may include a
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0007| lower deductible, lower coinsurance or additional categories
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0008| of benefits permitted under this section and all other
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0009| applicable sections of the Retiree Health Care Act to provide
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0010| additional levels of coverages and benefits. Any additional
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0011| contributions for these optional plans shall be paid for by
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0012| the eligible retiree or eligible dependent. The coverage
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0013| provided by the plans shall be secondary to all other benefit
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0014| coverages to which the eligible retiree or eligible dependent
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0015| is entitled. In the event a covered eligible retiree becomes
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0016| employed by an employer offering its employees a basic plan of
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0017| benefits, the coverage provided by the plan under the Retiree
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0018| Health Care Act shall be secondary to such coverage regardless
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0019| of whether the employee enrolls in that employer's plan. In
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0020| the event the eligible retiree or eligible dependent is
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0021| entitled to receive medicare hospital insurance benefits at no
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0022| charge, then the coverage provided by the plan under the
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0023| Retiree Health Care Act shall be secondary to medicare
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0024| hospital and medical insurance to the extent permitted by
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0025| federal law;
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0001| L. provide, at its discretion, different plans for
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0002| eligible retirees and eligible dependents covered by medicare
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0003| than the plans provided for eligible retirees and eligible
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0004| dependents who are not covered by medicare; and
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0005| M. promulgate and adopt rules and regulations
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0006| governing eligibility, participation, enrollment, length of
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0007| service and any other conditions or requirements for providing
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0008| substantially equal treatment to participating employers [who
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are independent public employers and their retirees and
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participating employees]."
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0011| Section 3. Section 10-7C-9 NMSA 1978 (being Laws 1990,
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0012| Chapter 6, Section 9, as amended) is amended to read:
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0013| "10-7C-9. PARTICIPATION.--
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0014| A. All eligible employers shall participate in the
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0015| Retiree Health Care Act except as provided in Subsection D or
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0016| Subsection E of this section. Participating employers are
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0017| required to continue existing group health insurance coverages
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0018| until such time as similar coverages are offered by the board
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0019| [under the Retiree Health Care Act].
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0020| B. Participation in the basic health insurance
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0021| coverages provided by the authority shall be conditioned upon
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0022| receipt by the board of a certificate of eligibility from the
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0023| educational retirement director, the executive secretary of
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0024| the public employees retirement association, the executive
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0025| director of the public school insurance authority or the
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0001| governing body of an independent public employer. Once
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0002| eligibility is established for each eligible retiree [who
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retires on or after the effective date of the Retiree Health
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Care Act], the board shall contribute from money in the fund
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0005| the authority's portion of the premium for the basic plan of
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0006| benefits commencing no earlier than January 1, 1991 plus the
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0007| balance of the premium, which shall be collected from the
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0008| retiree.
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0009| C. Each eligible retiree shall accept or reject
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0010| enrollment in the basic plan of benefits on an enrollment form
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0011| provided by the board. An eligible retiree who rejects
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0012| enrollment or fails to return a properly executed enrollment
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0013| form within the open enrollment period as established by the
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0014| board forfeits all entitlement and eligibility for benefits
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0015| under the Retiree Health Care Act until the next open
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0016| enrollment period as established by the board.
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0017| D. On or before January 1, 1991, municipalities,
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0018| counties and institutions of higher education that are
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0019| retirement system employers may at their option determine by
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0020| ordinance, or for institutions of higher education, by
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0021| resolution, to be excluded from coverage under the Retiree
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0022| Health Care Act; that determination shall be subject to the
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0023| following conditions:
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0024| (1) any contributions paid into the fund by a
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0025| municipality, county or institution of higher education that
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0001| exercises timely an irrevocable option not to participate in
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0002| the Retiree Health Care Act under this subsection shall be
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0003| returned without interest to that municipality, county or
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0004| institution of higher education for return of the employee
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0005| contributions to the employees and for crediting of the
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0006| employer contributions to the appropriate fund of the
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0007| municipality, county or institution of higher education. If
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0008| the determination to be excluded from coverage is exercised by
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0009| a municipality, county or institution of higher education
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0010| prior to July 1, 1990, then that municipality, county or
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0011| institution of higher education shall not be required to make
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0012| the contributions that would otherwise be required by Section
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0013| 10-7C-15 NMSA 1978;
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0014| (2) any municipality, county or institution
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0015| of higher education, in addition to complying with all other
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0016| required notice and public hearing or meeting requirements,
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0017| shall, no less than thirty days prior to the public hearing or
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0018| public meeting on a proposed ordinance or proposed resolution,
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0019| notify the authority of the public hearing or public meeting
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0020| by certified mail; and
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0021| (3) in the event that:
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0022| (a) the number of active employees
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0023| employed by municipalities contributing to the fund reaches a
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0024| number equaling sixty percent or more of all active employees
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0025| employed by all municipalities that are retirement system
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0001| employers, the municipal position on the board of the
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0002| authority shall be restored within sixty days of the date that
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0003| percentage is reached; provided, however, that if a
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0004| municipality with a population greater than one hundred
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0005| thousand that is located in a class A county exercises this
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0006| option, then the sixty-percent requirement shall be applied to
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0007| the remaining municipalities only;
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0008| (b) the number of active employees
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0009| employed by counties contributing to the fund reaches a number
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0010| equaling sixty percent or more of all active employees
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0011| employed by all counties that are retirement system employers,
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0012| the county position on the board of the authority shall be
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0013| restored within sixty days of the date that percentage is
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0014| reached; provided, however, that if a class A county exercises
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0015| this option, then the eighty-percent requirement shall be
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0016| applied to the remaining counties only; or
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0017| (c) the number of active employees
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0018| employed by institutions of higher learning contributing to
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0019| the fund reaches a number equaling seventy percent or more of
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0020| all active employees employed by an institution of higher
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0021| education contributing to the educational retirement fund, the
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0022| institution of higher education position on the board shall be
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0023| restored within sixty days of the date that percentage is
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0024| reached.
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0025| E. An independent public employer may become a
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0001| participating employer if that employer satisfies the
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0002| requirements imposed pursuant to Subsection M of Section
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0003| 10-7C-7 NMSA 1978 and if that employer also files with the
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0004| authority on or prior to January 1, 1991 or prior to July 1,
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0005| 1993 or July 1 of any year a written irrevocable election by
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0006| the governing body of that employer to participate in the
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0007| Retiree Health Care Act. Any such independent public employer
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0008| that chooses to become a participating employer after January
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0009| 1, 1993 shall begin making the appropriate preliminary
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0010| employer and employee contributions to the fund on the July 1
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0011| immediately following the adoption of the ordinance or
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0012| resolution. On the following January 1, eligible retirees of
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0013| those participating employers and their eligible dependents
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0014| shall be eligible to receive group health insurance coverage
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0015| pursuant to the provisions of the Retiree Health Care Act.
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0016| F. Any other provisions of the Retiree Health Care
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0017| Act notwithstanding, retirees [or active employees] of
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0018| institutions of higher education participating in the Retiree
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0019| Health Care Act for whom those institutions of higher
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0020| education have existing plans, programs, policies or contracts
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0021| for health care benefits shall not be required to participate
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0022| in the Retiree Health Care Act [nor shall employer or
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employee contributions be made to the authority on their
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behalf].
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0025| G. A municipality or county that enacted an
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0001| ordinance or an institution of higher education that enacted a
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0002| resolution prior to January 1, 1991 pursuant to Subsection D
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0003| of this section to be excluded from coverage under the Retiree
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0004| Health Care Act may [enact] become a participating employer
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0005| if that employer satisfies the requirements imposed pursuant
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0006| to subsection M of Section 10-7C-7 NMSA 1978 and if that
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0007| employer also enacts an ordinance or resolution, as
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0008| applicable, after a public hearing and published notice of the
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0009| hearing, prior to July 1, 1993 or July 1 of any year to choose
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0010| to become a participating employer under the Retiree Health
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0011| Care Act. Any such municipality, county or institution of
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0012| higher education that chooses to become a participating
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0013| employer after January 1, 1993 shall begin making the
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0014| appropriate preliminary employer and employee contributions
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0015| to the fund on the July 1 immediately following the adoption
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0016| of the ordinance or resolution. On the following January 1,
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0017| eligible retirees of those participating employers and their
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0018| eligible dependents shall be eligible to receive group health
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0019| insurance coverage pursuant to the provisions of the Retiree
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0020| Health Care Act."
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0021| Section 4. Section 10-7C-15 NMSA 1978 (being Laws 1990,
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0022| Chapter 6, Section 15) is amended to read:
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0023| "10-7C-15. RETIREE HEALTH CARE FUND CONTRIBUTIONS.--
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0024| A. Following completion of the preliminary
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0025| contribution period, each participating employer for the
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0001| fiscal year beginning July 1, 1990 and thereafter shall make
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0002| contributions to the fund in the amount of one percent of each
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0003| participating employee's annual salary.
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0004| B. Following completion of the preliminary
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0005| contribution period, each participating employee as a
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0006| condition of employment for the fiscal year commencing July 1,
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0007| 1990 and thereafter shall contribute to the fund an employee
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0008| contribution in an amount equal to one-half of one percent of
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0009| the employee's salary. Each month, participating employers
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0010| shall deduct the contribution from the participating
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0011| employee's salary and shall remit it to the board as provided
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0012| by any procedures that the board may require.
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0013| C. A participating employer that fails to remit
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0014| before the tenth day after the last day of the month all
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0015| employer and employee deposits required by the Retiree Health
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0016| Care Act to be remitted by the employer for the month shall
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0017| pay to the fund, in addition to the deposits, interest on the
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0018| unpaid amounts at the rate of six percent per [annum] year
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0019| compounded monthly.
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0020| D. The employer and employee contributions shall
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0021| be paid in monthly installments based on the percent of
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0022| payroll certified by the employer.
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0023| E. Except in the case of erroneously made
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0024| contributions or as may be otherwise provided in Subsection D
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0025| of Section [9 of the Retiree Health Care Act] 10-7C-9 NMSA
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0001| 1978, contributions from participating employers and
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0002| participating employees shall become the property of the fund
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0003| on receipt by the board and shall not be refunded under any
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0004| circumstances, including termination of employment or
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0005| termination of the participating employer's operation or
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0006| participation in the Retiree Health Care Act.
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0007| F. Notwithstanding any other provision in the
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0008| Retiree Health Care Act and at the first session of the
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0009| legislature following July 1, 1995, the legislature shall
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0010| review and adjust the distribution pursuant to Section 7-1-6.1
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0011| NMSA 1978 and the employer and employee contributions to the
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0012| authority in order to [insure] ensure the actuarial
|
0013| soundness of the benefits provided under the Retiree Health
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0014| Care Act."
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0015| Section 5. Section 10-7C-16 NMSA 1978 (being Laws 1990,
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0016| Chapter 6, Section 16, as amended) is amended to read:
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0017| "10-7C-16. RETIREE HEALTH CARE FUND--BUDGET.--
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0018| Expenditures for the administration of the Retiree Health Care
|
0019| Act shall be made as provided by an operating budget adopted
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0020| by the board and approved by the state budget division of the
|
0021| department of finance and administration as provided by law
|
0022| and pursuant to appropriation by the legislature. [For the
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development and administration of the program, up to ten full-
|
time equivalents are hereby authorized by the legislature.]"
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0025|
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