PRIOR PRINTER'S NO. 1643 PRINTER'S NO. 3264
No. 1401 Session of 1999
INTRODUCED BY NICKOL, EVANS, ALLEN, ARGALL, BAKER, BATTISTO,
BELARDI, BELFANTI, BENNINGHOFF, BROWNE, CAPPABIANCA, CLARK,
CLYMER, L. I. COHEN, M. COHEN, COSTA, CURRY, DALLY, DeWEESE,
FAIRCHILD, FICHTER, FRANKEL, FREEMAN, GEIST, GEORGE, GORDNER,
GRUCELA, GRUITZA, HANNA, HERMAN, JOSEPHS, KAISER, KIRKLAND,
MAITLAND, MANDERINO, MANN, MARSICO, MASLAND, McCALL, McGILL,
MICHLOVIC, R. MILLER, S. MILLER, MUNDY, ORIE, PETRONE,
PLATTS, PRESTON, RAYMOND, ROSS, SAINATO, SANTONI, SAYLOR,
SCHULER, SEMMEL, SERAFINI, SEYFERT, B. SMITH, S. H. SMITH,
SOLOBAY, STERN, SURRA, TANGRETTI, E. Z. TAYLOR, TIGUE,
TRELLO, VAN HORNE, VANCE, WOGAN, WRIGHT, YEWCIC, YOUNGBLOOD,
WOJNAROSKI, RUBLEY, STEELMAN, WILLIAMS, STETLER, TULLI,
NAILOR, LUCYK, COY, SHANER, YUDICHAK, HABAY, MARKOSEK,
LAUGHLIN, MAYERNIK, TRAVAGLIO, PETRARCA, PISTELLA,
McILHATTAN, LYNCH, DALEY AND PHILLIPS, APRIL 28, 1999
AS REPORTED FROM COMMITTEE ON EDUCATION, HOUSE OF
REPRESENTATIVES, AS AMENDED, MARCH 22, 2000
AN ACT
1 Amending Title 24 (Education) of the Pennsylvania Consolidated
2 Statutes, FURTHER DEFINING "ELIGIBLE ANNUITANTS"; providing <--
3 for the sponsorship and administration of a group health
4 insurance program for certain public school retirees and
5 other persons; providing for powers and duties of the Public
6 School Employees' Retirement Board; establishing the Public
7 School Retirees' Health Insurance Fund; providing for health
8 insurance premium assistance; and making editorial changes.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Section 8502.1 of Title 24 of the Pennsylvania <--
12 Consolidated Statutes is repealed.
13 SECTION 1. THE DEFINITION OF "ELIGIBLE ANNUITANTS" IN <--
14 SECTION 8102 OF TITLE 24 OF THE PENNSYLVANIA CONSOLIDATED
1 STATUTES IS AMENDED TO READ:
2 § 8102. DEFINITIONS.
3 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS PART SHALL
4 HAVE, UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE, THE
5 MEANINGS GIVEN TO THEM IN THIS SECTION:
6 * * *
7 "ELIGIBLE ANNUITANTS." ALL CURRENT AND PROSPECTIVE
8 ANNUITANTS WITH 24 1/2 OR MORE ELIGIBILITY POINTS AND ALL
9 CURRENT AND PROSPECTIVE DISABILITY ANNUITANTS. BEGINNING JANUARY
10 1, 1995, "ELIGIBLE ANNUITANTS" SHALL INCLUDE MEMBERS WITH 15 OR
11 MORE ELIGIBILITY POINTS WHO TERMINATED OR WHO TERMINATE SCHOOL
12 SERVICE ON OR AFTER ATTAINING SUPERANNUATION RETIREMENT AGE AND
13 WHO ARE ANNUITANTS WITH AN EFFECTIVE DATE OF RETIREMENT [AFTER
14 SUPERANNUATION AGE.] ON OR BEFORE DECEMBER 31, 2000. BEGINNING
15 JANUARY 1, 2001, ELIGIBLE ANNUITANTS SHALL INCLUDE MEMBERS WITH
16 15 OR MORE ELIGIBILITY POINTS WHO ARE 65 YEARS OF AGE OR OLDER.
17 * * *
18 SECTION 2. SECTION 8502.1 OF TITLE 24 IS REPEALED.
19 Section 2 3. Section 8509 of Title 24 is amended to read: <--
20 § 8509. Health insurance premium assistance program.
21 (a) Contribution rate.--Effective July 1, 1991, the premium <--
22 (A) CONTRIBUTION RATE.-- <--
23 (1) EFFECTIVE JULY 1, 1991, THE PREMIUM assistance
24 contribution rate established in section 8328(f) (relating to
25 actuarial cost method) shall be sufficient to provide
26 reserves in the health insurance account as of June 30, 1992,
27 for the payment of premium assistance set forth in
28 [subsection (b)] Chapter 91 (relating to health insurance
29 premium assistance) during the fiscal year beginning July 1,
30 1992, for all eligible annuitants who by that date elect to
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1 be participating eligible annuitants and all additional
2 eligible annuitants who elect to be participating eligible
3 annuitants in the health insurance premium assistance program
4 during the fiscal year beginning July 1, 1992. For each <--
5 fiscal year beginning after July 1, 1991, the premium
6 assistance FISCAL YEAR BEGINNING JULY 1, 1992. <--
7 (2) FOR EACH FISCAL YEAR BEGINNING AFTER JULY 1, 1991,
8 AND ENDING JUNE 30, 2001, THE PREMIUM ASSISTANCE contribution
9 rate shall be established to provide reserves sufficient,
10 when combined with unexpended amounts from the reserves set
11 aside the previous fiscal year for health insurance
12 assistance payments, to provide premium assistance payments
13 in the subsequent fiscal year for all participating eligible
14 annuitants. The board is authorized to expend an amount not <--
15 to ANNUITANTS. <--
16 (3) FOR EACH FISCAL YEAR BEGINNING JULY 1, 2001, THE
17 PREMIUM ASSISTANCE CONTRIBUTION RATE SHALL BE DETERMINED IN
18 ACCORDANCE WITH SECTION 9103 (RELATING TO CONTRIBUTION RATE).
19 (4) THE BOARD IS AUTHORIZED TO EXPEND AN AMOUNT NOT TO
20 exceed 2% of the health insurance account each year to pay
21 for the direct expense of administering the health insurance
22 premium assistance program, which expenditure may be included
23 in the board's consideration when it establishes the premium
24 assistance contribution rate each year.
25 [(b) Amount of premium assistance.--Effective July 1, 1992,
26 participating eligible annuitants shall receive premium
27 assistance payments of $55 per month or the actual monthly
28 premium, whichever is less. Such payments shall be made by the
29 board to the participating eligible annuitants for their payment
30 directly to their approved insurance carriers. Such payments may
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1 also be paid by the board, at the board's discretion, directly
2 to the participating eligible annuitants' approved insurance
3 carriers. The board shall have the right to verify the
4 application and receipt of the payments by the participating
5 eligible annuitants and their approved insurance carriers.
6 (c) Participating eligible annuitants.--An eligible
7 annuitant may elect to participate in the health insurance
8 premium assistance program by filing an election to be covered
9 by a health insurance carrier approved by the board and to
10 participate in the health insurance premium assistance program.
11 Participation in the health insurance premium assistance program
12 shall begin upon the effective date of the health insurance
13 coverage provided by a health insurance carrier approved by the
14 board, but in no event before the effective date of retirement.]
15 Section 3 4. Title 24 is amended by adding a part to read: <--
16 PART V
17 HEALTH INSURANCE FOR RETIRED SCHOOL EMPLOYEES
18 Chapter
19 87. Preliminary Provisions
20 89. Group Health Insurance Program
21 91. Health Insurance Premium Assistance
22 93. Miscellaneous Provisions
23 CHAPTER 87
24 PRELIMINARY PROVISIONS
25 Sec.
26 8701. Short title of part.
27 8702. Definitions.
28 § 8701. Short title of part.
29 This part shall be known and may be cited as the Public
30 School Retirees' Health Insurance Act.
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1 § 8702. Definitions.
2 (a) General rule.--Subject to additional definitions
3 contained in subsequent provisions of this part which are
4 applicable to specific provisions of this part, the following
5 words and phrases when used in this part shall have the meanings
6 given to them in this section unless the context clearly
7 indicates otherwise:
8 "Eligible person." An individual who is an annuitant or
9 survivor annuitant, or the spouse or dependent of the annuitant <--
10 AN ANNUITANT OR SURVIVOR ANNUITANT. <--
11 "Fund." The Public School Retirees' Health Insurance Fund.
12 "Participating eligible annuitant." An eligible annuitant
13 who elects to participate in the health insurance premium
14 assistance program identified in section 8509 (relating to
15 health insurance premium assistance program).
16 "Plan year." The period July 1, 1999 2000, through December <--
17 31, 1999 2000, shall be the first plan year. After December 31, <--
18 1999 2000, the plan year shall be the calendar year. <--
19 "Program." The group health insurance program that may be
20 sponsored by the Public School Employees' Retirement Board under
21 this part.
22 "RESERVE ACCOUNT." THE RESTRICTED RECEIPT ACCOUNT <--
23 ESTABLISHED IN SECTION 8902(B) (RELATING TO PUBLIC SCHOOL
24 RETIREES' HEALTH INSURANCE FUND).
25 (b) Additional terms.--Any term used in this part not
26 defined in subsection (a) shall be governed by the definitions
27 given in Part IV (relating to retirement for school employees)
28 and the definitions set forth in Part IV shall be deemed to be
29 incorporated into this part.
30 CHAPTER 89
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1 GROUP HEALTH INSURANCE PROGRAM
2 Sec.
3 8901. Administration.
4 8902. Corporate powers. <--
5 8903 8902. Public School Retirees' Health Insurance Fund.
6 8904 8903. Management of fund. <--
7 § 8901. Administration.
8 The board may sponsor a group health insurance program to be
9 funded by and for eligible persons. The board may administer the
10 program itself or through any legal entity authorized by law to
11 do so. The program may also be administered in whole or in part
12 on a fully insured or self-funded basis at the board's sole
13 discretion. In addition to the powers granted by other
14 provisions of this part, the board shall have the powers
15 necessary or convenient to carry out this part, including, but
16 not limited to, the power to:
17 (1) Set and adjust premium rates sufficient to maintain
18 the adequacy of the reserve established by this part and to
19 fully fund the benefits offered by and to pay for the
20 administrative expenses related to the program.
21 (2) Determine and make necessary changes to the benefit
22 structure for the program.
23 (3) Determine enrollment procedures.
24 (4) Impose and collect necessary fees and charges.
25 (5) Establish an annual budget for the program and to
26 make disbursements from the fund that are consistent with the
27 budget.
28 (6) Establish independent procurement and contracting <--
29 procedures and contract for goods, equipment and services,
30 provided that the procedures award the contracting of goods
19990H1401B3264 - 6 -
1 and equipment on a system of competitive bidding and that no
2 member of the board, nor any of its employees, shall in any
3 way be interested in any purchase made for the program.
4 (6) CONTRACT FOR GOODS, EQUIPMENT, SERVICES, CONSULTANTS <--
5 AND OTHER PROFESSIONAL PERSONNEL AS NEEDED TO OPERATE THE
6 PROGRAM.
7 (7) Provide for an annual audit of the fund and program
8 by an independent certified public accounting firm.
9 (8) Terminate the program or any portion of the program,
10 at any time if, in the board's discretion, it is prudent to
11 do so.
12 (9) Solicit and accept gifts, grants, loans and other
13 aid from any person, corporation or other legal entity or
14 from the Federal, State or local government and participate
15 in any Federal, State or local government program if
16 necessary for prudent management of the program.
17 (10) Promulgate rules and regulations regarding the
18 program.
19 § 8902. Corporate powers. <--
20 Notwithstanding any other provision of law, including, but
21 not limited to, the act of April 9, 1929 (P.L.177, No.175),
22 known as The Administrative Code of 1929, and the act of April
23 9, 1929 (P.L.343, No.176), known as The Fiscal Code, the board
24 is hereby granted and shall have and may exercise, in its sole
25 discretion, all the powers necessary or convenient for the
26 carrying out of the purposes of this part, including, but not
27 limited to, the following rights and powers:
28 (1) All the power and privileges of a corporation.
29 (2) To adopt, use and alter at will a corporate seal.
30 (3) To make and alter bylaws for the management of its
19990H1401B3264 - 7 -
1 affairs.
2 (4) To enter into contracts of all kinds and to execute
3 all instruments necessary or convenient for carrying on its
4 operations.
5 (5) To be a party litigant in any court having
6 jurisdiction according to law in any form of action
7 whatsoever.
8 (6) To acquire, hold and dispose of personal property,
9 tangible and intangible.
10 (7) To acquire, hold and dispose of real property, or
11 any interest therein, to be used by the board for the
12 purposes of its offices and operations.
13 (8) Procure insurance against any loss in connection
14 with its property and operations in such amounts and from
15 such insurers as may be necessary and desirable for the
16 operation of the program.
17 (9) Appear in its own behalf before boards, commissions,
18 departments or other agencies of Federal, State or local
19 government.
20 (10) Procure office supplies, furniture and equipment,
21 including, but not limited to, telecommunication, computer
22 and other electronic data processing equipment, supplies,
23 materials, furnishings and fixtures, in such amounts and from
24 such vendors, as may be necessary and desirable for the
25 efficient operation of the program.
26 (11) Employ, appoint, promote, train, discharge, fix the
27 compensation of, authorize and prescribe the duties of such
28 officers and employees as may be appropriate for the proper
29 conduct of the work of the board.
30 (12) Contract for the services of a chief medical
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1 examiner, an actuary, investment advisors, counselors, an
2 investment coordinator and such other professional personnel
3 as it deems advisable.
4 (13) Notwithstanding section 8501(e) (relating to public
5 school employees' retirement board) or the act of October 15,
6 1980 (P.L.950, No.164), known as the Commonwealth Attorneys
7 Act, contract for the services of an independent legal
8 counsel.
9 § 8903 8902. Public School Retirees' Health Insurance Fund. <--
10 (a) Establishment of fund.--The Public School Retirees'
11 Health Insurance Fund is established in the State Treasury. The
12 moneys of the fund are appropriated on a continuing basis and
13 shall be used exclusively for the purposes set forth in this
14 part. All of the assets of the fund shall be maintained and
15 accounted for separate from all other funds and moneys of the
16 Commonwealth and the Public School Employees' Retirement Fund
17 identified in section 8522 (relating to Public School Employees'
18 Retirement Fund).
19 (b) Reserve account.--
20 (1) A restricted RESERVE account is established within <--
21 the fund for the purpose of establishing and maintaining a
22 reserve sufficient to pay not less than 50% of the expected
23 claims experience of the program on a self-funded basis each
24 plan year. The initial funding for the reserve account shall
25 occur in accordance with section 9303 (relating to initial
26 funding of reserve account). Beginning in plan year 2000 FOR <--
27 THE PLAN YEAR 2001 AND EACH PLAN YEAR THEREAFTER, the board
28 shall annually establish through an actuary retained by the
29 board the amount necessary to maintain this reserve. Any
30 additional moneys needed to meet the reserve amount
19990H1401B3264 - 9 -
1 established by this subsection shall be collected through the
2 adjustment of premium rates or through other available
3 sources.
4 (2) The moneys in the reserve account may be invested by
5 the board separate from other moneys of the fund. All
6 earnings derived from investment of the assets of the reserve
7 account shall be credited to the reserve account.
8 (c) Transfers.--The board may transfer moneys between AMONG <--
9 the various accounts of the fund, including the reserve account
10 established by subsection (b), as may be necessary to satisfy
11 the provisions of this part. Transfers from the reserve account
12 may be made only for the payment of claims or expected claims as
13 determined by the actuary retained by the board.
14 (d) Administration.--The assets of the fund shall be
15 preserved, invested and expended solely pursuant to and for the
16 purposes set forth in this part.
17 (e) Composition.--The fund shall consist of:
18 (1) All payments made by eligible persons or received
19 from the health insurance account established by section 8526
20 (relating to health insurance account) and all interest,
21 earnings and additions thereto.
22 (2) Any other money, public or private, appropriated or
23 made available to the board for the fund or the restricted <--
24 RESERVE account from any source and all interest, earnings <--
25 and additions thereto.
26 § 8904 8903. Management of fund. <--
27 (a) Control and management of fund.--The members of the
28 board shall be the trustees of the fund. Regardless of any other
29 provision of law governing the investment of funds under the
30 control of an administrative board of the State government, the
19990H1401B3264 - 10 -
1 trustees shall have exclusive control and management of the fund
2 and full power to invest the fund in accordance with the
3 provisions of this section, subject, however, to the exercise of
4 that degree of judgment, skill and care under the circumstances
5 then prevailing which persons of prudence, discretion and
6 intelligence who are familiar with such matters exercise in the
7 management of their own affairs not in regard to speculation,
8 but in regard to the permanent disposition of the fund,
9 considering the probable income to be derived therefrom as well
10 as the probable safety of their capital. The trustees shall have
11 the power to hold, purchase, sell, lend, assign, transfer or
12 dispose of any of the securities and investments in which any of
13 the moneys in the fund shall have been invested, as well as of
14 the proceeds of the investments, including, but not limited to,
15 directed commissions which have accrued to the benefit of the
16 fund as a consequence of the investments and of the moneys
17 belonging to the fund, subject in every case to meeting the
18 standard of prudence set forth in this section.
19 (b) Custodian of fund.--The State Treasurer shall be the
20 custodian of the fund.
21 (c) Payment from fund.--All payments from the fund shall be
22 made by the State Treasurer in accordance with requisitions
23 signed by the secretary of the board or the secretary's
24 designees and ratified by resolution of the board. The board
25 shall reimburse the State Treasurer for the cost of making
26 disbursements from the fund in the manner provided by law.
27 CHAPTER 91
28 HEALTH INSURANCE PREMIUM ASSISTANCE
29 Sec.
30 9101. Premium assistance.
19990H1401B3264 - 11 -
1 9102. Election to participate.
2 9103. Annual inflation adjustment contribution. <--
3 9103. CONTRIBUTION RATE. <--
4 § 9101. Premium assistance.
5 (a) Amounts.--
6 (1) Effective July 1, 1992, a participating eligible
7 annuitant shall receive premium assistance payments of $55
8 per month or the actual monthly premium, whichever is less.
9 (2) Beginning with the monthly premium payment for
10 January 1, 2000 JANUARY 2001, and continuing each month <--
11 thereafter, a participating eligible annuitant shall receive
12 premium assistance payments of the lesser of:
13 (i) $55 per month plus the annual inflation <--
14 adjustment under subsection (b); or
15 (I) $150 PER MONTH; OR <--
16 (ii) the actual monthly premium.
17 (b) Annual inflation adjustment.-- <--
18 (1) Beginning with the monthly premium assistance
19 payments for January 1, 2000, and continuing annually
20 thereafter, the amount of premium assistance payable may be
21 increased, in a manner to be determined by the board, in
22 consultation with the actuary, by equitably apportioning the
23 annual inflation adjustment contributions to be paid into the
24 fund under section 9103 (relating to annual inflation
25 adjustment contribution).
26 (2) The equitable apportionment of the annual inflation
27 adjustment shall be subject to the right of the board to
28 reserve a portion of the annual inflation adjustment for
29 apportionment in future plan years to ensure the financial
30 integrity of the program and the premium assistance benefit.
19990H1401B3264 - 12 -
1 For plan year 2000 the maximum monthly premium assistance
2 payment, under subsection (a), after adjustment shall not be
3 less than $150 per month. The board shall publish its
4 determination of the annual inflation adjustment as a notice
5 in the Pennsylvania Bulletin.
6 (c) (B) Funding.--The funding for premium assistance, <--
7 including the annual inflation adjustment provided for in
8 subsection (b), shall be in accordance with sections 8509(a)
9 (relating to health insurance premium assistance program) and
10 9103 (RELATING TO CONTRIBUTION RATE). <--
11 (d) (C) Payments.--The payments under this section shall be <--
12 made by the board to participating eligible annuitants for their
13 payment directly to their approved insurance carriers or the
14 fund, as the case may be. The payments may also be paid by the
15 board, at the board's discretion, directly to the participating
16 eligible annuitants' approved insurance carriers or the fund.
17 (e) (D) Verification of payment.--The board shall have the <--
18 right to verify the application and receipt of the payments by
19 the participating eligible annuitants and their approved
20 insurance carriers. The board shall have the right to recoup
21 from participating eligible annuitants any payments that upon
22 verification were incorrectly paid by reason of the
23 participating eligible annuitants' actual cost of their health
24 insurance premiums, whether the incorrect payments occurred
25 through the fault of the participating eligible annuitants or
26 otherwise.
27 § 9102. Election to participate.
28 An eligible annuitant may elect to participate in the health
29 insurance premium assistance program identified in section 8509
30 (relating to health insurance premium assistance program) by
19990H1401B3264 - 13 -
1 filing an election to be covered by a health insurance carrier
2 approved by the board and to participate in the health insurance
3 premium assistance program. Participation in the health
4 insurance premium assistance program shall begin upon the
5 effective date of the health insurance coverage provided by a
6 health insurance carrier approved by the board, but in no event
7 before the effective date of retirement.
8 § 9103. Annual inflation adjustment contribution. <--
9 § 9103. CONTRIBUTION RATE. <--
10 (a) Payments by employers.--Beginning July 1, 2000 2001, and <--
11 continuing annually thereafter, each employer identified in
12 section 8327 (relating to payments by employers) shall make
13 contributions to the Health Insurance Account of the Public
14 School Employees' Retirement Fund each quarter in an amount <--
15 equal to .72% of SUFFICIENT TO FUND, ON A FULLY RESERVED BASIS, <--
16 THE PREMIUM ASSISTANCE BENEFIT SET FORTH IN SECTION 9101(A)(2)
17 (RELATING TO PREMIUM ASSISTANCE). THE EMPLOYER CONTRIBUTIONS
18 SHALL BE PAID EACH QUARTER IN AN AMOUNT EQUAL TO THE PERCENTAGE
19 COMPUTED BY THE ACTUARY IN ACCORDANCE WITH THE PRINCIPLES OF
20 SECTION 8328(A), (B) AND (C) (RELATING TO ACTUARIAL COST METHOD)
21 WHICH PERCENTAGE SHALL BE MULTIPLIED BY the total compensation
22 during the pay periods in the preceding quarter for the
23 employees who were members of the Public School Employees'
24 Retirement System during such period, including members on
25 activated military service leave. subject to adjustment as <--
26 provided in subsection (c).
27 (b) Reimbursement by Commonwealth.--For each school year
28 beginning with the 2000-2001 school year AFTER JUNE 30, 2001, <--
29 each employer that is a school entity shall be paid by the
30 Commonwealth for contributions paid under subsection (a) based
19990H1401B3264 - 14 -
1 upon school service of active members of the system after June
2 30, 2000 2001, as follows: <--
3 (1) The Commonwealth shall pay each school entity for
4 contributions made to the fund based upon school service of
5 all active members, including members on activated military
6 service leave, whose effective dates of employment with their
7 school entities are after June 30, 1994, and who also had not
8 previously been employed by any school entity within this
9 Commonwealth an amount equal to one-half of the contributions
10 payable under subsection (a) as computed by the actuary and
11 certified by the board multiplied by the market value/income
12 aid ratio of the school entity. For no school year shall any
13 school entity receive less than the amount that would result
14 if the market value/income aid ratio as defined in section
15 2501(14.1) of the act of March 10, 1949 (P.L.30, No.14),
16 known as the Public School Code of 1949, was 0.50.
17 (2) The Commonwealth shall pay each school entity for
18 contributions made to the fund based upon school service of
19 all active members, including members on activated military
20 service leave, who are not described in paragraph (1), one-
21 half of the amount as computed by the actuary and certified
22 by the board.
23 (3) School entities shall have up to five days after
24 receipt of the Commonwealth's portion of the employer's
25 liability to make payment to the fund.
26 (c) Minimum level of contributions.-- <--
27 (1) If during any year commencing with the year that
28 begins July 1, 2001, the total compensation shall be less
29 than the total compensation from the previous year, the
30 percentage specified in subsection (a) shall be adjusted in
19990H1401B3264 - 15 -
1 such a manner that the total employer contributions for
2 premium assistance under this section shall not be less than
3 the total contributions paid by the employers for premium
4 assistance for the previous year.
5 (2) Any adjustments to the percentages set forth in this
6 section shall be calculated by the actuary, certified by the
7 board and published as a notice in the Pennsylvania Bulletin.
8 The board's certification shall be final and not subject to
9 modification by the Secretary of the Budget.
10 (d) (C) Collection of payments.--The board shall have the <--
11 same powers and duties to collect and receive all Commonwealth
12 and employer contributions and payments required under this
13 part, as those powers and duties set forth in Part IV (relating
14 to retirement for school employees).
15 CHAPTER 93
16 MISCELLANEOUS PROVISIONS
17 Sec.
18 9301. Status of program relative to Public School Employees'
19 Retirement Code.
20 9302. Construction of part.
21 9303. Initial funding of reserve account.
22 § 9301. Status of program relative to Public School Employees'
23 Retirement Code.
24 (a) General rule.--The program shall be an approved health
25 insurance program for purposes of section 8505(i) (relating to
26 duties of board regarding applications and elections of members)
27 and shall be an approved insurance carrier for purposes of
28 section 8509 (relating to health insurance premium assistance
29 program).
30 (b) State guarantee.--The program shall not be subject to
19990H1401B3264 - 16 -
1 the provisions of section 8531 (relating to State guarantee).
2 (c) Liability.--Neither the board, including its employees,
3 nor the assets of the Commonwealth or the Public School
4 Employees' Retirement Fund shall be liable for or used to pay
5 any expenses or claims incurred by the program, except as
6 otherwise provided by law.
7 § 9302. Construction of part.
8 (a) General rule.--No provision of this part shall be
9 construed as a cancellation of any existing health insurance
10 program operated by the board or referenced in section 32 of the
11 act of August 5, 1991 (P.L.183, No.23), entitled "An act
12 amending Titles 24 (Education) and 71 (State Government) of the
13 Pennsylvania Consolidated Statutes, further providing for the
14 Public School Employees' Retirement System and the State
15 Employees' Retirement System; adding and amending certain
16 definitions; further providing for membership in the systems,
17 for creditable nonschool and nonstate service and the purchase
18 of credit, for incentives for special early retirement, for
19 contributions to the retirement funds, for annuities and the
20 rights and duties of annuitants, for health insurance premium
21 assistance, for board membership and for the re-amortization and
22 management of the retirement funds."
23 (b) Nature of rights.--Any termination or other modification
24 of the program, including, but not limited to, a change in
25 premium rates, benefit options or structure or insurance
26 providers, shall not give rise to any contractual rights or
27 claims by any eligible persons or any other person claiming an
28 interest, either directly or indirectly, in the program. No
29 provision of this part, nor any rule or regulation adopted
30 pursuant to this part, shall create in any person a contractual
19990H1401B3264 - 17 -
1 right in that provision.
2 § 9303. Initial funding of reserve account.
3 For the purpose of providing the initial funding of the
4 reserve account established in section 8903(b) 8902(B) (relating <--
5 to Public School Retirees' Health Insurance Fund), the
6 Commonwealth shall make contributions into the reserve account
7 of the fund in an amount equal to .72% .65% of the total <--
8 compensation of all active members during the period July 1,
9 1999, through June 30, 2000 2000, THROUGH JUNE 30, 2001, which <--
10 amount shall be computed by the actuary and certified by the
11 board. The contributions required by this section shall be paid
12 on a quarterly basis beginning with the quarter ending September
13 30, 1999 2000. In the event the board does not administer the <--
14 group health insurance program authorized by this part on a
15 self-funded basis within five years of the effective date of
16 this part, then the remaining balance in the reserve fund shall
17 be returned by the board to the General Fund.
18 SECTION 5. THE RESERVE ACCOUNT OF THE PUBLIC SCHOOL <--
19 RETIREES' HEALTH INSURANCE FUND ESTABLISHED UNDER 24 PA.C.S. §
20 8902(B) (RELATING TO PUBLIC SCHOOL RETIREES' HEALTH INSURANCE
21 FUND) MAY BE USED BY THE PUBLIC SCHOOL EMPLOYEES' RETIREMENT
22 BOARD TO COVER ANY SHORTFALLS IN FUNDING FOR THE PREMIUM
23 ASSISTANCE BENEFIT SET FORTH IN 24 PA.C.S. § 9101(A)(2)
24 (RELATING TO PREMIUM ASSISTANCE) FOR THE MONTHLY PREMIUM
25 PAYMENTS FOR JANUARY 2001 THROUGH AND INCLUDING JUNE 2001.
26 THEREFORE, NOTWITHSTANDING THE PROVISIONS OF 24 PA.C.S. §
27 8902(C), TRANSFERS FROM THE RESERVE ACCOUNT MAY BE MADE TO THE
28 HEALTH INSURANCE ACCOUNT ESTABLISHED BY SECTION 8526 (RELATING
29 TO HEALTH INSURANCE ACCOUNT), FOR THE PURPOSES OF COVERING ANY
30 SHORTFALLS IN FUNDING, IF ANY, FOR THE PREMIUM ASSISTANCE
19990H1401B3264 - 18 -
1 BENEFIT SET FORTH IN 24 PA.C.S. § 9101(A)(2) FOR THE MONTHLY
2 PREMIUM PAYMENTS FOR JANUARY 2001 THROUGH AND INCLUDING JUNE
3 2001. IN THE EVENT THE BOARD USES THE RESERVE ACCOUNT TO COVER
4 ANY SHORTFALLS IN FUNDING FOR THE PREMIUM ASSISTANCE BENEFIT SET
5 FORTH IN 24 PA.C.S. § 9101(A)(2) FOR THE MONTHLY PREMIUM
6 PAYMENTS FOR JANUARY 2001 THROUGH AND INCLUDING JUNE 2001, THEN
7 THE BOARD MAY INCLUDE IN THE CONTRIBUTION RATE ESTABLISHED
8 PURSUANT TO 24 PA.C.S. § 9103 (RELATING TO CONTRIBUTION RATE),
9 FOR THE FISCAL YEAR BEGINNING JULY 1, 2001, AND FOR THE FISCAL
10 YEAR BEGINNING JULY 1, 2002, AN AMOUNT NECESSARY TO REPLACE ALL
11 SUMS INCLUDING INTEREST WHICH WOULD HAVE ACCRUED, SO USED FROM
12 THE RESERVE ACCOUNT ESTABLISHED IN THE PUBLIC SCHOOL RETIREES'
13 HEALTH INSURANCE FUND.
14 SECTION 6. NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT
15 TO THE CONTRARY, THE PREMIUM RATES FOR THE PROGRAM MAY NOT BE
16 ADJUSTED TO COVER ANY SHORTFALLS IN FUNDING FOR THE PREMIUM
17 ASSISTANCE BENEFIT SET FORTH IN 24 PA.C.S. § 9101(A)(2)
18 (RELATING TO PREMIUM ASSISTANCE) FOR THE MONTHLY PREMIUM
19 PAYMENTS FOR JANUARY 2001 THROUGH AND INCLUDING JUNE 2001.
20 Section 4 7. All acts and parts of acts are repealed insofar <--
21 as they are inconsistent with this act.
22 Section 5 8. This act shall take effect immediately. <--
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