SB-0546, As Passed House, October 1, 2007

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 546

A bill to amend 1980 PA 300, entitled

"The public school employees retirement act of 1979,"

by amending section 91 (MCL 38.1391), as amended by 2006 PA 617.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 91. (1) Except as otherwise provided in this section, the

retirement system shall pay the entire monthly premium or

membership or subscription fee for hospital, medical-surgical, and

sick care benefits for the benefit of a retirant or retirement

allowance beneficiary who elects coverage in the plan authorized by

the retirement board and the department. ~~Upon the death of the~~

~~retirant, a retirement allowance beneficiary who became a~~

~~retirement allowance beneficiary under section 85(8) or (9) is not~~

~~a health insurance dependent and is not entitled to health benefits~~

~~under this section except as provided in subsection (10).~~ Except as

otherwise provided in subsection (8), this subsection does not

apply to a retirant who first becomes a member after June 30, 2008.

(2) The retirement system may pay up to the maximum of the

amount payable under subsection (1) toward the monthly premium for

hospital, medical-surgical, and sick care benefits for the benefit

of a retirant or retirement allowance beneficiary enrolled in a

group health insurance or prepaid service plan not authorized by

the retirement board and the department, if enrolled before June 1,

1975, for whom the retirement system on July 18, 1983 was making a

payment towards his or her monthly premium.

(3) A retirant or retirement allowance beneficiary receiving

hospital, medical-surgical, and sick care benefits coverage under

subsection (1) or (2), until eligible for medicare, shall have an

amount equal to the cost chargeable to a medicare recipient for

part B of medicare deducted from his or her retirement allowance.

(4) The retirement system shall pay 90% of the monthly premium

or membership or subscription fee for dental, vision, and hearing

benefits for the benefit of a retirant or retirement allowance

beneficiary who elects coverage in the plan authorized by the

retirement board and the department. Payments shall begin under

this subsection upon approval by the retirement board and the

department of plan coverage and a plan provider. Except as

otherwise provided in subsection (8), this subsection does not

apply to a retirant who first becomes a member after June 30, 2008.

(5) The retirement system shall pay up to 90% of the maximum

of the amount payable under subsection (1) toward the monthly

premium or membership or subscription fee for hospital, medical-

surgical, and sick care benefits coverage described in subsections

(1) and (2) for each health insurance dependent of a retirant

receiving benefits under subsection (1) or (2). Payment shall not

exceed 90% of the actual monthly premium or membership or

subscription fee. The retirement system shall pay 90% of the

monthly premium or membership or subscription fee for dental,

vision, and hearing benefits described in subsection (4) for the

benefit of each health insurance dependent of a retirant receiving

benefits under subsection (4). Payment for health benefits coverage

for a health insurance dependent of a retirant shall not be made

after the retirant's death, unless the retirant designated a

retirement allowance beneficiary as provided in section 85 and the

dependent was covered or eligible for coverage as a health

insurance dependent of the retirant on the retirant's date of

death. Payment for health benefits coverage shall not be made for a

health insurance dependent after the later of the retirant's death

or the retirement allowance beneficiary's death. Payment under this

subsection and subsection (6) began October 1, 1985 for health

insurance dependents who on July 10, 1985 were covered by the

hospital, medical-surgical, and sick care benefits plan authorized

by the retirement board and the department. Payment under this

subsection and subsection (6) for other health insurance dependents

shall not begin before January 1, 1986. Except as otherwise

provided in subsection (8), this subsection does not apply to a

retirant who first becomes a member after June 30, 2008.

(6) The payment described in subsection (5) shall also be made

for each health insurance dependent of a deceased member or

deceased duty disability retirant if a retirement allowance is

being paid to a retirement allowance beneficiary because of the

death of the member or duty disability retirant as provided in

section 43c(c), 89, or 90. Payment for health benefits coverage for

a health insurance dependent shall not be made after the retirement

allowance beneficiary's death.

(7) The payments provided by this section shall not be made on

behalf of a retiring section 82 deferred member or health insurance

dependent of a deferred member having less than 21 full years of

attained credited service or the retiring deferred member's

retirement allowance beneficiary, and shall not be made on behalf

of a retirement allowance beneficiary of a deferred member who dies

before retiring. The retirement system shall pay, on behalf of a

retiring section 82 deferred member or health insurance dependent

of a deferred member or a retirement allowance beneficiary of a

deceased deferred member, either of whose allowance is based upon

not less than 21 years of attained credited service, 10% of the

payments provided by this section, increased by 10% for each

attained full year of credited service beyond 21 years, not to

exceed 100%. This subsection applies to any member who first became

a member on or before June 30, 2008 and attains deferred status

under section 82 after October 31, 1980.

(8) For a member or deferred member who first becomes a member

after June 30, 2008, the retirement system shall pay up to 90% of

the monthly premium or membership or subscription fee for the

hospital, medical-surgical, and sick care benefits plan, the dental

Senate Bill No. 546 (H-8) as amended October 1, 2007

plan, vision plan, and hearing plan, or any combination of the

plans for the benefit of the retirant and his or her retirement

allowance beneficiary and health insurance dependents, or for the

benefit of the deceased member's retirement allowance beneficiary

if the retirant or deceased member has [25] years or more of service

credit under this act, and the retirant, deceased retirant, or

deceased member was at least 60 years of age at the time of

application for benefits under this section. If the retirant or

deceased member is less than 60 years of age at the time of

application for benefits under this section, the retirement system

shall pay 90% of the monthly premium or membership or subscription

fee for the hospital, medical-surgical, and sick care benefits

plan, the dental plan, vision plan, and hearing plan, or any

combination of the plans for the benefit of the retirant and his or

her retirement allowance beneficiary and the retirant's health

insurance dependents, or for the benefit of the deceased member's

retirement allowance beneficiary if the retirant or deceased member

has [25] or more years of service credit granted under section 68. If

a retirant, deceased retirant, or deceased member described in this

subsection has 10 or more but less than [25] years of service credit

under this act and the retirant was at least 60 years of age at the

time of application for benefits under this section, the retirement

system shall pay a portion of the monthly premium or membership or

subscription fee for the plans or combination of plans equal to the

product of 3% and the retirant's, deceased retirant's, or deceased

member's years of service [for the first 10 years and 4% for each year

after the first 10 years]. This subsection does not apply to a

member who receives a disability retirement allowance under section

Senate Bill No. 546 (H-8) as amended October 1, 2007

86 or 87 or to a deceased member's retirement allowance beneficiary

under section 90.

(9) The retirement system shall not pay the premiums or

membership or subscription fees under subsection (8) until the

retirant or retirement allowance beneficiary requests enrollment in

the plans or combination of plans in writing in the manner

prescribed by the retirement system. [

] Not more than 1 year's service

credit shall be counted for purposes of subsection (8) and this

subsection in any school fiscal year.

(10) A member who retires under section 43b or 81 and who

elects to purchase service credit on or after July 1, 2008 is not

eligible for payments under this section for the hospital, medical-

surgical, and sick care benefits plan, the dental plan, vision

plan, or hearing plan, or any combination of the plans described in

this section until the first date that the member would have been

eligible to retire under section 43b or 81 if he or she had not

purchased the service credit and had accrued a sufficient amount of

service credit under section 68. A member who first becomes a

member on or after July 1, 2008 shall not be eligible for health

benefits under this subsection until at least the time of

application under subsection (8). The retirement system shall apply

a method that enables it to make the determination under this

subsection.

(11) Except for a member who retires under section 86 or 87 or

a member who meets the requirements under subsection (7) or (8),

the retirement system shall not pay the benefits provided in

subsection (1) or (4) unless the member was employed and has

received a minimum total of 1/2 of a year of service credit granted

pursuant to section 68 during the 2 school fiscal years immediately

preceding the member's retirement allowance effective date or the

member has received a minimum of 1/10 of a year of service credit

granted pursuant to section 68 during each of the 5 school fiscal

years immediately preceding the member's retirement allowance

effective date.

(12) ~~(8)~~ Any retirant or retirement allowance beneficiary

excluded from payments under this section may participate in the

hospital, medical-surgical, and sick care benefits plan, the dental

plan, vision plan, or hearing plan, or any combination of the plans

described in this section in the manner prescribed by the

retirement system at his or her own cost.

(13) ~~(9)~~ The hospital, medical-surgical, and sick care

benefits plan, dental plan, vision plan, and hearing plan that

covers retirants, retirement allowance beneficiaries, and health

insurance dependents pursuant to this section shall contain a

coordination of benefits provision that provides all of the

following:

(a) If the person covered under the hospital, medical-

surgical, and sick care benefits plan is also eligible for medicare

or medicaid, or both, then the benefits under medicare or medicaid,

or both, shall be determined before the benefits of the hospital,

medical-surgical, and sick care benefits plan provided pursuant to

this section.

(b) If the person covered under any of the plans provided by

this section is also covered under another plan that contains a

coordination of benefits provision, the benefits shall be

coordinated as provided by the coordination of benefits act, 1984

PA 64, MCL 550.251 to 550.255.

this section is also covered under another plan that does not

contain a coordination of benefits provision, the benefits under

the other plan shall be determined before the benefits of the plan

provided pursuant to this section.

(14) ~~(10) A~~ Beginning January 1, 2009, upon the death of the

retirant, a retirement allowance beneficiary who became a

retirement allowance beneficiary under section 85(8) or (9) is not

a health insurance dependent and is not entitled to health benefits

under this section except as provided in this subsection. Beginning

January 1, 2009, a surviving spouse selected as a retirement

allowance beneficiary under section 85(8) or (9) may elect the

insurance coverages provided in this section provided that payment

for the elected coverages is the responsibility of the surviving

spouse and is paid in a manner prescribed by the retirement system.

(15) ~~(11)~~ For purposes of this section:

(a) "Health insurance dependent" means any of the following:

(i) Except as provided in subsection ~~(1)~~ (14), the spouse of

the retirant or the surviving spouse to whom the retirant or

deceased member was married at the time of the retirant's or

deceased member's death.

(ii) An unmarried child, by birth or adoption, of the retirant

or deceased member, until December 31 of the calendar year in which

the child becomes 19 years of age.

(iii) An unmarried child, by birth or adoption, of the retirant

or deceased member, until December 31 of the calendar year in which

the child becomes 25 years of age, who is enrolled as a full-time

student, and who is or was at the time of the retirant's or

deceased member's death a dependent of the retirant or deceased

member as defined in section 152 of the internal revenue code.

(iv) An unmarried child, by birth or adoption, of the retirant

or deceased member who is incapable of self-sustaining employment

because of mental or physical disability, and who is or was at the

time of the retirant's or deceased member's death a dependent of

the retirant or deceased member as defined in section 152 of the

internal revenue code.

(v) The parents of the retirant or deceased member, or the

parents of his or her spouse, who are residing in the household of

the retirant or retirement allowance beneficiary.

(vi) An unmarried child who is not the child by birth or

adoption of the retirant or deceased member but who otherwise

qualifies to be a health insurance dependent under subparagraph

(ii), (iii), or (iv), if the retirant or deceased member is the legal

Senate Bill No. 546 (H-8) as amended October 1, 2007

guardian of the unmarried child.

(b) "Medicaid" means benefits under the federal medicaid

program established under title XIX of the social security act,

~~chapter 531, 49 Stat. 620,~~ 42 USC 1396 to ~~1396f, 1396g-1 to 1396r-~~

~~6, and 1396r-8 to~~ 1396v.

program established under title XVIII of the social security act,

~~chapter 531, 49 Stat. 620,~~ 42 USC 1395 to ~~1395b, 1395b-2, 1395b-6~~

~~to 1395b-7, 1395c to 1395i, 1395i-2 to 1395i-5, 1395j to 1395t,~~

~~1395u to 1395w, 1395w-2 to 1395w-4, 1395w-21 to 1395w-28, 1395x to~~

~~1395yy, and 1395bbb to 1395ggg~~ 1395hhh.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law [and take effect]:

(a) House Bill No. 5194.

(b) House Bill No. 5198.