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H.B. 253

This document includes House Committee Amendments incorporated into the bill on Fri, Jan 30, 2004 at 4:57 PM by kholt. -->              1     

RETIREMENT OFFICE AMENDMENTS

             2     
2004 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Ann W. Hardy

             5     
             6      LONG TITLE
             7      General Description:
             8          This bill modifies the Utah State Retirement and Insurance Benefit Act provisions,
             9      including many technical or conforming amendments.
             10      Highlighted Provisions:
             11          This bill:
             12          .    adds "Utah State Retirement Systems" as an alternative official name for the Utah
             13      State Retirement Office;
             14          .    provides that reemployment restrictions following retirement does not apply to
             15      H [ appointed ] APPOINTIVE h officers;
             16          .    amends the length of time a participating employer is required to maintain records
             17      needed for retirement purposes to the earliest of three years after the date of
             18      retirement or the date of death of the employee;
             19          .    amends the criteria for being unable to locate surviving beneficiaries in order to pay
             20      benefits to within 12 months of the date a reasonable attempt is made to locate the
             21      beneficiaries;
             22          .    allows a retiree in either the contributory or noncontributory system whose
             23      retirement date is on or after July 1, 1995, to make an irrevocable cancellation of
             24      lump-sum death benefits;
             25          .    requires a member in the contributory system who is transferred or reemployed to
             26      transfer to the noncontributory system if the new employer is a participating
             27      employer in the noncontributory system;


             28          .    provides that contribution rates for each participating employer in the public safety
             29      contributory system and the public safety noncontributory systems may be different
             30      based on the participating employers current funding status and actuarial
             31      experience;
             32          .    provides that employers that maintain a regularly constituted fire department are
             33      eligible to participate in the firefighters retirement system;
             34          .    provides that employees who have medical employee benefit plan coverage at the
             35      time of their retirement are eligible for future Medicare supplement coverage; and
             36          .    makes technical corrections.
             37      Monies Appropriated in this Bill:
             38          None
             39      Other Special Clauses:
             40          This bill takes effect on July 1, 2004.
             41      Utah Code Sections Affected:
             42      AMENDS:
             43          49-11-201, as renumbered and amended by Chapter 250, Laws of Utah 2002
             44          49-11-504, as last amended by Chapter 240, Laws of Utah 2003
             45          49-11-602, as last amended by Chapter 240, Laws of Utah 2003
             46          49-11-609, as last amended by Chapter 240, Laws of Utah 2003
             47          49-11-612, as last amended by Chapter 240, Laws of Utah 2003
             48          49-12-404, as renumbered and amended by Chapter 250, Laws of Utah 2002
             49          49-13-205, as renumbered and amended by Chapter 250, Laws of Utah 2002
             50          49-13-404, as renumbered and amended by Chapter 250, Laws of Utah 2002
             51          49-14-301, as renumbered and amended by Chapter 250, Laws of Utah 2002
             52          49-15-301, as renumbered and amended by Chapter 250, Laws of Utah 2002
             53          49-16-201, as renumbered and amended by Chapter 250, Laws of Utah 2002
             54          49-19-401, as last amended by Chapter 240, Laws of Utah 2003
             55          49-19-402, as enacted by Chapter 250, Laws of Utah 2002
             56          49-20-201, as renumbered and amended by Chapter 250, Laws of Utah 2002
             57          49-20-401, as last amended by Chapter 240, Laws of Utah 2003
             58     


             59      Be it enacted by the Legislature of the state of Utah:
             60          Section 1. Section 49-11-201 is amended to read:
             61           49-11-201. Establishment of retirement office -- An independent state agency --
             62      Office exemption.
             63          (1) (a) There is established the Utah State Retirement Office, which may also be
             64      known and function as the Utah State Retirement Systems.
             65          (b) The office shall administer the systems, plans, and programs and perform all other
             66      functions assigned to it under this title.
             67          (2) (a) The office is an independent state agency.
             68          (b) It is subject to legislative and executive department budgetary review and comment.
             69          (3) The office may establish branch offices upon approval of the board.
             70          (4) The board and office are exempt from those acts which are applicable to state and
             71      other governmental entities under this code.
             72          Section 2. Section 49-11-504 is amended to read:
             73           49-11-504. Reemployment of a retiree -- Restrictions.
             74          (1) A person who retires from a nonparticipating employer is not subject to any
             75      postretirement restrictions under this title.
             76          (2) A retiree of an agency who returns to work at a different agency is not subject to
             77      any postretirement restrictions under this section and may not earn additional service credit.
             78          (3) For the purposes of Subsections (4) and (5), "full-time" employment means
             79      employment requiring 20 hours of work per week or more or at least a half-time teaching
             80      contract.
             81          (4) A retiree of an agency who is reemployed on a full-time basis by the same agency
             82      within six months of the date of retirement is subject to the following:
             83          (a) the agency shall immediately notify the office;
             84          (b) the office shall cancel the retiree's allowance and reinstate the retiree to active
             85      member status;
             86          (c) the allowance cancellation and reinstatement to active member status is effective on
             87      the first day of the month following the date of reemployment;
             88          (d) the reinstated retiree may not retire again with a recalculated benefit for a two-year
             89      period from the date of cancellation of the original allowance, and if the retiree retires again


             90      within the two-year period, the original allowance shall be resumed; and
             91          (e) a reinstated retiree retiring after the two-year period shall be credited with the
             92      service credit in the retiree's account at the time of the first retirement and from that time shall
             93      be treated as a member of a system, including the accrual of additional service credit, but
             94      subject to recalculation of the allowance under Subsection (9).
             95          (5) A retiree of an agency who is reemployed by the same agency within six months of
             96      retirement on a less than full-time basis by the same agency is subject to the following:
             97          (a) the retiree may earn, without penalty, compensation from that position which is not
             98      in excess of the exempt earnings permitted by Social Security;
             99          (b) if a retiree receives compensation in a calendar year in excess of the Social Security
             100      limitation, 25% of the allowance shall be suspended for the remainder of the six-month period;
             101          (c) the effective date of a suspension and reinstatement of an allowance shall be set by
             102      the office; and
             103          (d) any suspension of a retiree's allowance under this Subsection (5) shall be applied
             104      on a calendar year basis.
             105          (6) For six months immediately following retirement, the retiree and participating
             106      employer shall:
             107          (a) maintain an accurate record of gross earnings in employment;
             108          (b) report the gross earnings at least monthly to the office;
             109          (c) immediately notify the office in writing of any postretirement earnings under
             110      Subsection (4); and
             111          (d) immediately notify the office in writing whether postretirement earnings equal or
             112      exceed the exempt earnings under Subsection (5).
             113          (7) A retiree of an agency who is reemployed by the same agency after six months from
             114      the retirement date is not subject to any postretirement [penalties] restrictions under this title
             115      and may not earn additional service credit.
             116          (8) If a participating employer hires a retiree that may not earn additional service credit
             117      under this section, the participating employer shall contribute the same percentage of a retiree's
             118      salary that the participating employer would have been required to contribute if the retiree were
             119      an active member, up to the amount allowed by federal law, to a retiree designated:
             120          (a) defined contribution plan administered by the board, if the participating employer


             121      participates in the defined contribution plan administered by the board; or
             122          (b) defined contribution plan offered by the participating employer if the participating
             123      employer does not participate in a defined contribution plan administered by the board.
             124          (9) Notwithstanding any other provision of this section, a retiree who has returned to
             125      work, accrued additional service credit, and again retires shall have the retiree's allowance
             126      recalculated using:
             127          (a) the formula in effect at the date of the retiree's original retirement for all service
             128      credit accrued prior to that date; and
             129          (b) the formula in effect at the date of the subsequent retirement for all service credit
             130      accrued between the first and subsequent retirement dates.
             131          (10) This section does not apply to H [ appointed ] APPOINTIVE h officers or elected
             131a      positions.
             132          (11) The board may make rules to implement this section.
             133          Section 3. Section 49-11-602 is amended to read:
             134           49-11-602. Participating employer to maintain records -- Time limit -- Penalties
             135      for failure to comply.
             136          (1) A participating employer shall maintain records necessary to calculate benefits
             137      under this title and other records necessary for proper administration of this title as required by
             138      the office.
             139          (2) A participating employer shall maintain the records required under Subsection (1)
             140      until the [latest] earliest of:
             141          (a) three years after the date of retirement of the employee from a system or plan;
             142          (b) three years after the date of death of the employee; or
             143          (c) 65 years from the date [the employee terminates] of employment with the
             144      participating employer.
             145          (3) A participating employer shall be liable to the office for:
             146          (a) any liabilities and expenses, including administrative expenses and the cost of
             147      increased benefits to members, resulting from the participating employer's failure to maintain
             148      records under this section; and
             149          (b) a penalty equal to 1% of the participating employer's last month's contributions.
             150          (4) The executive director may waive all or any part of the interest, penalties, expenses,
             151      and fees if the executive director finds there were extenuating circumstances surrounding the


             152      participating employer's failure to comply with this section.
             153          (5) The executive director may estimate the length of service, compensation, or age of
             154      any member, if that information is not contained in the records.
             155          Section 4. Section 49-11-609 is amended to read:
             156           49-11-609. Beneficiary designations -- Revocation of beneficiary designation --
             157      Procedure -- Beneficiary not designated -- Payment to survivors in order established
             158      under the Uniform Probate Code -- Restrictions on payment -- Payment of deceased's
             159      expenses.
             160          (1) As used in this section, "member" includes a member, retiree, participant, covered
             161      individual, a spouse of a retiree participating in the insurance benefits created by Sections
             162      49-12-404 and 49-13-404 , or an alternate payee under a domestic relations order dividing a
             163      defined contribution account.
             164          (2) The most recent beneficiary designations contained in office records, including
             165      electronic records, at the time of the member's death are binding in the payment of any benefits
             166      due under this title.
             167          (3) (a) Except where an optional continuing benefit is chosen, or the law makes a
             168      specific benefit designation to a dependent spouse, a member may revoke a beneficiary
             169      designation at any time and may execute and file a different beneficiary designation with the
             170      office.
             171          (b) A change of beneficiary designation shall be completed on forms provided by the
             172      office.
             173          (4) (a) All benefits payable by the office may be paid or applied to the benefit of the
             174      surviving next of kin of the deceased in the order of precedence established under Title 75,
             175      Chapter 2, Intestate Succession and Wills, if:
             176          (i) no beneficiary is designated or if all designated beneficiaries have predeceased the
             177      member;
             178          (ii) the location of the beneficiary or secondary beneficiaries cannot be ascertained by
             179      the office within 12 months of the date [beneficiaries are provided with the forms] a reasonable
             180      attempt is made by the office to locate the beneficiaries; or
             181          (iii) the beneficiary has not completed the forms necessary to pay the benefits within
             182      six months of the date that beneficiary forms are sent to the beneficiary's last-known address.


             183          (b) (i) A payment may not be made to a person included in any of the groups referred
             184      to in Subsection (4)(a) if at the date of payment there is a living person in any of the groups
             185      preceding it.
             186          (ii) Payment to a person in any group based upon receipt from the person of an
             187      affidavit in a form satisfactory to the office that:
             188          (A) there are no living individuals in the group preceding it;
             189          (B) the probate of the estate of the deceased has not been commenced; and
             190          (C) more than three months have elapsed since the date of death of the decedent.
             191          (5) Benefits paid under this section shall be:
             192          (a) a full satisfaction and discharge of all claims for benefits under this title; and
             193          (b) payable by reason of the death of the decedent.
             194          Section 5. Section 49-11-612 is amended to read:
             195           49-11-612. Nonassignability of benefits or payments -- Exemption from legal
             196      process.
             197          (1) Except as provided in Subsections (2), (3), and (4), the right of any member, retiree,
             198      participant, or beneficiary to any retirement benefit, retirement payment, or any other
             199      retirement right accrued or accruing under this title and the assets of the funds created by this
             200      title are not subject to alienation or assignment by the member, retiree, participant, or their
             201      beneficiaries and are not subject to attachment, execution, garnishment, or any other legal or
             202      equitable process.
             203          (2) The office may, upon the request of the retiree, deduct from the retiree's allowance
             204      insurance premiums or other dues payable on behalf of the retiree, but only to those entities
             205      that have received the deductions prior to February 1, 2002.
             206          (3) (a) The office shall provide for the division of an allowance, defined contribution
             207      account, continuing monthly death benefit, or refund of member contributions upon
             208      termination to former spouses and family members under an order of a court of competent
             209      jurisdiction with respect to domestic relations matters on file with the office.
             210          (b) The court order shall specify the manner in which the allowance, defined
             211      contribution account, continuing monthly death benefit, or refund of member contributions
             212      shall be partitioned, whether as a fixed amount or as a percentage of the benefit.
             213          (c) Allowances, continuing monthly death benefits, and refunds of member


             214      contributions split under a domestic relations order are subject to the following:
             215          (i) the amount to be paid or the period for which payments shall be made under the
             216      original domestic relations order may not be altered if the alteration affects the actuarial
             217      calculation of the allowance;
             218          (ii) payments to an alternate payee shall begin at the time the member or beneficiary
             219      begins receiving payments; and
             220          (iii) the alternate payee shall receive payments in the same form as [payments]
             221      allowances received by the member or beneficiary.
             222          (4) In accordance with federal law, the board may deduct the required amount from any
             223      benefit, payment, or other right accrued or accruing to any member of a system, plan, or
             224      program under this title to offset any amount that member owes to a system, plan, or program
             225      administered by the board.
             226          (5) The board shall make rules to implement this section.
             227          Section 6. Section 49-12-404 is amended to read:
             228           49-12-404. Lump-sum death benefit for retiree and spouse.
             229          (1) (a) Upon retirement, a retiree may elect to have the office deduct an actuarially
             230      determined amount from the retiree's allowance to provide a lump-sum benefit payable to a
             231      beneficiary upon the death of the retiree.
             232          (b) [A] Upon retirement, a retiree may also elect to have an actuarially determined
             233      amount deducted from the retiree's allowance to provide a lump-sum death benefit payable to a
             234      beneficiary upon the death of the retiree's lawful spouse at the time of retirement.
             235          (c) The board may make rules for the administration of this lump-sum death benefit.
             236          (2) (a) For [retirees] a retiree who [pay] pays for a lump-sum death benefit under this
             237      section through a reduction of an allowance, benefits shall be paid in accordance with Sections
             238      49-11-609 and 49-11-610 .
             239          (b) If the retiree chooses Option Three, Four, Five, or Six, and a lump-sum death
             240      benefit is payable after the death of the retiree [or the lawful spouse], the allowance shall be
             241      restored to its original amount.
             242          (3) (a) A retiree whose retirement date is on or after July 1, 1995, may elect to cancel
             243      the lump-sum death benefit under this section.
             244          (b) The cancellation under this Subsection (3) is irrevocable.


             245          (c) Upon cancellation, the allowance shall be restored to its original amount and
             246      benefits under this section may not be paid.
             247          Section 7. Section 49-13-205 is amended to read:
             248           49-13-205. Conversion to system -- Time schedule -- Conversion windows.
             249          (1) An employee governed under Section 49-13-201 shall make the election to
             250      participate in this system within six months of July 1, 1986.
             251          (2) (a) (i) An employer governed under Sections 49-13-201 and 49-13-202 shall make
             252      the election to participate in this system within six months of July 1, 1986.
             253          (ii) The employer shall indicate whether or not it elects to participate by enacting a
             254      resolution or ordinance to that effect.
             255          (iii) Prior to the enactment of the resolution or ordinance, a hearing shall be held by the
             256      employer, at which all employees of the political subdivision shall be given an opportunity to
             257      be heard on the question of participating in this system.
             258          (iv) Notice of the hearing shall be mailed to all employees within 30 days of the
             259      hearing and shall contain the time, place, and purpose of the hearing.
             260          (b) A regular full-time employee has six months from the date the employer elects to
             261      participate in this system in which to make the election to participate in this system and
             262      become eligible for service credit in this system.
             263          (3) Subsections (1) and (2) shall be used to provide a second time period of conversion
             264      to this system beginning July 1, 1990.
             265          (4) Subsections (1) and (2) shall be used to provide a third time period of conversion to
             266      this system beginning July 1, 1995.
             267          (5) A member of the Contributory Retirement System who is employed by one agency
             268      and who either transfers to or is reemployed by another agency shall transfer to the
             269      Noncontributory Retirement System as of the date of employment, if the participating employer
             270      has elected to participate in the Noncontributory Retirement System.
             271          Section 8. Section 49-13-404 is amended to read:
             272           49-13-404. Lump-sum death benefit for retiree and spouse.
             273          (1) (a) Upon retirement, a retiree may elect to have the office deduct an actuarially
             274      determined amount from the retiree's allowance to provide a lump-sum benefit payable to a
             275      beneficiary upon the death of the retiree.


             276          (b) [A] Upon retirement, a retiree may also elect to have an actuarially determined
             277      amount deducted from the retiree's allowance to provide a lump-sum death benefit payable to a
             278      beneficiary upon the death of the retiree's lawful spouse at the time of retirement.
             279          (c) The board shall make rules for the administration of this lump-sum death benefit.
             280          (2) (a) For [retirees] a retiree who [pay] pays for a lump-sum death benefit under this
             281      section through a reduction of an allowance, benefits shall be paid in accordance with Sections
             282      49-11-609 and 49-11-610 .
             283          (b) If the retiree chooses Option Three, Four, Five, or Six, and a lump-sum death
             284      benefit is payable after the death of the retiree [or the lawful spouse], the allowance shall be
             285      restored to its original amount.
             286          (3) (a) A retiree whose retirement date is on or after July 1, 1995, may elect to cancel
             287      the lump-sum death benefit under this section.
             288          (b) The cancellation under this Subsection (3) is irrevocable.
             289          (c) Upon cancellation, the allowance shall be restored to its original amount and
             290      benefits under this section may not be paid.
             291          Section 9. Section 49-14-301 is amended to read:
             292           49-14-301. Contributions -- Two divisions -- Election by employer to pay
             293      employee contributions -- Accounting for and vesting of member contributions --
             294      Deductions.
             295          (1) Participating employers and members shall jointly pay the certified contribution
             296      rates to the office to maintain this system on a financially and actuarially sound basis.
             297          (2) For purposes of determining contribution rates, this system is divided into two
             298      divisions according to Social Security coverage as follows:
             299          (a) members of this system with on-the-job Social Security coverage are in Division A;
             300      and
             301          (b) members of this system without on-the-job Social Security coverage are in Division
             302      B.
             303          (3) (a) A participating employer may elect to pay all or part of the required member
             304      contributions, in addition to the required participating employer contributions.
             305          (b) Any amount contributed by a participating employer under this section shall vest to
             306      the member's benefit as though the member had made the contribution.


             307          (c) The required member contributions shall be reduced by the amount that is paid by
             308      the participating employer.
             309          (4) (a) All member contributions are credited by the office to the account of the
             310      individual member.
             311          (b) This amount, plus refund interest, is held in trust for the payment of benefits to the
             312      member or the member's beneficiaries.
             313          (c) All member contributions are vested and nonforfeitable.
             314          (5) (a) Each member is considered to consent to payroll deductions of member
             315      contributions.
             316          (b) The payment of compensation less these payroll deductions is considered full
             317      payment for services rendered by the member.
             318          (6) Contribution rates for a participating employer may be different than for other
             319      participating employers based on the participating employer's current funding status and
             320      actuarial experience.
             321          Section 10. Section 49-15-301 is amended to read:
             322           49-15-301. Contributions -- Two divisions.
             323          (1) Participating employers shall pay the certified contribution rates to the office to
             324      maintain this system on a financially and actuarially sound basis.
             325          (2) For purposes of determining contribution rates, this system is divided into two
             326      divisions according to Social Security coverage.
             327          (a) Members of this system with on-the-job Social Security coverage are Division A.
             328          (b) Members of this system without on-the-job Social Security coverage are in Division
             329      B.
             330          (3) Contribution rates for a participating employer may be different than for other
             331      participating employers based on the participating employer's current funding status and
             332      actuarial experience.
             333          Section 11. Section 49-16-201 is amended to read:
             334           49-16-201. System membership -- Eligibility.
             335          (1) A firefighter service employee who performs firefighter service for an employer
             336      participating in this system is eligible for service credit in this system upon the earliest of:
             337          (a) July 1, 1971, if the firefighter service employee was employed by the participating


             338      employer on July 1, 1971, and the participating employer was participating in this system on
             339      that date;
             340          (b) the date the participating employer begins participating in this system if the
             341      firefighter service employee was employed by the participating employer on that date; or
             342          (c) the date the firefighter service employee is hired to perform firefighter services for a
             343      participating employer.
             344          (2) (a) (i) A participating employer that has public safety service and firefighter service
             345      employees that require cross-training and duty shall enroll the dual purpose employees in the
             346      system in which the greatest amount of time is actually worked.
             347          (ii) The employees shall either be full-time public safety service or full-time firefighter
             348      service employees of the participating employer.
             349          (b) (i) Prior to transferring a dual purpose employee from one system to another, the
             350      participating employer shall receive written permission from the office.
             351          (ii) The office may request documentation to verify the appropriateness of the transfer.
             352          (3) (a) A person hired by a regularly constituted fire department on or after July 1,
             353      1971, who does not perform firefighter service is not eligible for service credit in this system.
             354          (b) The nonfirefighter service employee shall become a member of the system for
             355      which the nonfirefighter service employee qualifies for service credit.
             356          (c) The service credit exclusion under this Subsection (3) may not be interpreted to
             357      prohibit the assignment of a disabled or partially disabled firefighter to a nonfirefighter service
             358      position.
             359          (d) If Subsection (3)(c) applies, the firefighter service employee remains eligible for
             360      service credit in this system.
             361          (4) An allowance or other benefit may not be granted under this system that is based
             362      upon the same service for benefits received under some other system.
             363          (5) Service as a volunteer firefighter is not eligible for service credit in this system.
             364          (6) An employer that maintains a regularly constituted fire department is eligible to
             365      participate in this system.
             366          Section 12. Section 49-19-401 is amended to read:
             367           49-19-401. Eligibility for an allowance -- Governor -- Legislator.
             368          (1) A governor is qualified to receive an allowance when:


             369          (a) the governor has submitted to the office a notarized retirement application form that
             370      states the proposed retirement date; and
             371          (b) one of the following conditions is met as of the retirement date:
             372          (i) the governor has completed at least one full term in office and has attained an age of
             373      65 years; or
             374          (ii) the governor has served as governor of the state for at least ten years and has
             375      attained an age of 62 years.
             376          (2) A legislator is qualified to receive an allowance when:
             377          (a) the legislator has submitted to the office a notarized retirement application form
             378      that states the proposed retirement date; and
             379          (b) one of the following conditions is met as of the retirement date:
             380          (i) the legislator has completed at least four years in the Legislature and has attained an
             381      age of 65 years; or
             382          (ii) the legislator has completed at least ten years in the Legislature and has attained an
             383      age of 62 years.
             384          (3) (a) The retirement date shall be the 1st or the 16th day of the month as selected by
             385      the member.
             386          (b) The retirement date may not be more than 90 days before or after the date the
             387      application is received by the office.
             388          (4) A member who withdraws member contributions shall forfeit all allowances based
             389      on those contributions.
             390          (5) If a retired legislator is elected to another term in the Legislature or continues to
             391      serve in the Legislature [after reaching age 65], the legislative allowance ceases at the
             392      beginning of each session under rules established by the board, but is restored at the same
             393      amount at the end of the session.
             394          (6) A member receiving an allowance while serving as a legislator is eligible for
             395      additional service credits and allowance adjustments at the end of each term of office if the
             396      legislator continues as a contributing member during the member's service as a legislator.
             397          Section 13. Section 49-19-402 is amended to read:
             398           49-19-402. Calculation of allowance -- Reduction for early retirement.
             399          (1) (a) The base retirement amount for a governor under this plan is $500 per term,


             400      adjusted as provided in Section 49-19-404 since 1973.
             401          (b) A governor's allowance shall be calculated by multiplying the base retirement
             402      amount at the [end of the governor's service] retirement date by the number of terms the
             403      governor served, including fractions of terms.
             404          (2) (a) The base retirement amount for a legislator under this plan is $10 per year of
             405      service in the Legislature, adjusted as provided in Section 49-19-404 , since 1967.
             406          (b) A legislator's allowance shall be calculated by multiplying the base retirement
             407      amount at the [end of the legislator's service] retirement date by the number of years the
             408      legislator served, including fractions of years.
             409          (3) If a governor or legislator retires prior to age 65, the allowance shall be reduced by
             410      3% for each year of retirement between age 62 and age 65.
             411          Section 14. Section 49-20-201 is amended to read:
             412           49-20-201. Program participation -- Eligibility -- Optional for certain groups.
             413          (1) (a) The state shall participate in the program on behalf of its employees.
             414          (b) Other employers, including political subdivisions and educational institutions, are
             415      eligible, but are not required, to participate in the program on behalf of their employees.
             416          (2) (a) The Department of Health may participate in the program for the purpose of
             417      providing health and dental benefits to children enrolled in the Utah Children's Health
             418      Insurance Program created in Title 26, Chapter 40, Utah Children's Health Insurance Act, if the
             419      provisions in Subsection 26-40-110 (4) occur.
             420          (b) If the Department of Health participates in the program under the provisions of this
             421      Subsection (2), all insurance risk associated with the Children's Health Insurance Program shall
             422      be the responsibility of the Department of Health and not the program or the office.
             423          (3) A covered individual covered under a medical employee benefit plan shall be
             424      eligible for coverage after termination of employment under rules adopted by the board.
             425          (4) [Only retirees, members, participants, and their current spouses] Only the following
             426      are eligible for Medicare supplement coverage under this chapter upon becoming eligible for
             427      Medicare Part A and Part B coverage[.]:
             428          (a) retirees;
             429          (b) members;
             430          (c) participants;


             431          (d) employees who have medical employee benefit plan coverage at the time of their
             432      retirement; and
             433          (e) current spouses of those who are eligible under Subsections (4)(a) through (d).
             434          Section 15. Section 49-20-401 is amended to read:
             435           49-20-401. Program -- Powers and duties.
             436          (1) The program shall:
             437          (a) act as a self-insurer of employee benefit plans and administer those plans;
             438          (b) enter into contracts with private insurers or carriers to underwrite employee benefit
             439      plans as considered appropriate by the program;
             440          (c) indemnify employee benefit plans or purchase commercial reinsurance as
             441      considered appropriate by the program;
             442          (d) provide descriptions of all employee benefit plans under this chapter in cooperation
             443      with covered employers;
             444          (e) process claims for all employee benefit plans under this chapter or enter into
             445      contracts, after competitive bids are taken, with other benefit administrators to provide for the
             446      administration of the claims process;
             447          (f) obtain an annual actuarial review of all health and dental benefit plans and a
             448      periodic review of all other employee benefit plans;
             449          (g) consult with the covered employers to evaluate employee benefit plans and develop
             450      recommendations for benefit changes;
             451          (h) annually submit a budget and audited financial statements to the governor and
             452      Legislature which includes total projected benefit costs and administrative costs;
             453          (i) maintain reserves sufficient to liquidate the unrevealed claims liability and other
             454      liabilities of the employee benefit plans as certified by the program's consulting actuary;
             455          (j) submit its recommended benefit adjustments for state employees to the director of
             456      the state Department of Human Resource Management;
             457          (k) determine benefits and rates, upon approval of the board, for multiemployer risk
             458      pools, retiree coverage, and conversion coverage;
             459          (l) determine benefits and rates, upon approval of the board and the Legislature, for
             460      state employees;
             461          (m) administer benefits and rates, upon ratification of the board, for single employer


             462      risk pools;
             463          (n) request proposals for provider networks or health and dental benefit plans
             464      administered by third party carriers at least once every three years for the purposes of:
             465          (i) stimulating competition for the benefit of covered individuals;
             466          (ii) establishing better geographical distribution of medical care services; and
             467          (iii) providing coverage for both active and retired covered individuals;
             468          (o) offer proposals which meet the criteria specified in a request for proposals and
             469      accepted by the program to active and retired state covered individuals and which may be
             470      offered to active and retired covered individuals of other covered employers at the option of the
             471      covered employer;
             472          (p) perform the same functions established in Subsections (1)(a), (b), (e), and (h) for
             473      the Department of Health if the program provides program benefits to children enrolled in the
             474      Utah Children's Health Insurance Program created in Title 26, Chapter 40, Utah Children's
             475      Health Insurance Act;
             476          (q) establish rules and procedures governing the admission of political subdivisions or
             477      educational institutions and their employees to the program;
             478          (r) contract directly with medical providers to provide services for covered individuals;
             479      and
             480          (s) take additional actions necessary or appropriate to carry out the purposes of this
             481      chapter.
             482          (2) (a) Funds budgeted and expended shall accrue from rates paid by the covered
             483      employers and covered individuals.
             484          (b) Administrative costs shall be approved by the board and reported to the governor
             485      and the Legislature.
             486          (3) The Department of Human Resource Management shall include the benefit
             487      adjustments described in Subsection (1)(j) in the total compensation plan recommended to the
             488      governor required under Subsection 67-19-12 (6)(a).
             489          Section 16. Effective date.
             490          This bill takes effect on July 1, 2004.





Legislative Review Note
    as of 1-26-04 1:21 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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