PA 08-112—sHB 5841

Appropriations Committee

AN ACT INCREASING THE HEALTH INSURANCE SUBSIDY TO RETIRED TEACHERS AND CONCERNING CREDITED SERVICE FOR TEACHERS' RETIREMENT

SUMMARY: This act increases, from $110 to $220 per person, the monthly state health insurance premium subsidy for certain retired teachers, and their spouses or surviving spouses, who receive health insurance coverage from the retiree's last employing board of education. To qualify for the increased subsidy, the retiree must (1) have attained normal age to participate in Medicare (currently, age 65); (2) not be eligible for Part A of Medicare without cost; and (3) contribute at least $220 per month towards his or her medical and prescription drug plan provided by the board of education.

The act also allows Teachers' Retirement System (TRS) members to purchase credit in TRS for more than 10 years of out-of-state teaching service, provided they pay the full present value actuarial cost of the additional benefits arising from the purchased service exceeding 10 years.

Finally, the act allows teachers who meet certain conditions to retain TRS service credit for employment outside the scope of their teaching certificates.

EFFECTIVE DATE: July 1, 2008, except for the provision concerning credit for service outside the scope of the member's certificate, which is effective on passage.

RETIRED TEACHERS' HEALTH INSURANCE

By law, the determining factor in how a retired teacher receives health coverage is whether the teacher participates in Medicare. Those who do may choose a Medicare supplement plan provided by the Teachers' Retirement Board (TRB). Those who do not must be offered coverage by their last employing board of education. The coverage the board offers must be the same coverage it offers to active teachers. A local board is not obligated to pay for the cost of the retirees' health insurance but may do so under a collective bargaining agreement or other arrangement. The board must charge the retiree the same premium that is assessed by the insurance company for the coverage. For self-insured plans, the local school board must charge the retiree the budgetary premium rate for the form of coverage received. The cost of health insurance varies by board, depending on the coverage offered.

The TRB provides a subsidy payment on behalf of the retiree to each local board to offset the cost of retiree health insurance coverage. The subsidy must first be used reduce the amount retirees pay for the coverage, with any balance used to offset the board's costs. Under prior law, the state subsidy for all retirees covered by local board plans was $110 per person per month. This act doubles the subsidy for certain retirees to $220.

Federal law requires all teachers hired on or after April 1, 1986 to contribute to and participate in Medicare, but Connecticut teachers hired before that date are excluded from both Medicare and Social Security under a 1951 state law. This act increases the subsidy only for retirees in the latter group. The increase does not apply to retired teachers who will be eligible for Medicare but are covered by local board plans until they reach the Medicare eligibility age.

PURCHASED SERVICE CREDIT FOR OUT-OF-STATE TEACHING SERVICE

By law, TRS members may purchase up to one year of credit in the TRS for each two years of teaching service in another state or U. S. territory or possession provided the member is not entitled to receive any other governmental retirement benefit (other than Social Security) based on the service. Prior law limited the total purchased service in TRS to an aggregate of 10 years. This act exempts out-of-state teaching service from the 10-year limit.

It also requires a TRS member to pay 100% of the present value actuarial cost for out-of-state teaching service exceeding the 10-year limit. Members continue to pay only 50% of the present value actuarial cost for most other service purchases, including the purchase of fewer than 10 years' out-of-state teaching service.

CREDIT FOR SERVICE OUTSIDE SCOPE OF CERTIFICATION

The act makes an exception to the general rule that, after July 1, 1975, teachers receive credit in TRS only for Connecticut public school employment for which they have a valid teaching certificate or permit for the position they hold.

The act's exception applies to any teacher who holds a teaching certificate or permit issued by the State Board of Education but receives notice from the State Department of Education on or after December 1, 2003 that it is not the proper certificate for the position in which the teacher is or has been employed. As under prior law, such a teacher cannot continue to accrue service in the TRS until he or she is properly certified for the position, but the act bars the TRB from rescinding any service credit the teacher previously earned in the position and requires the board to restore any such credit it rescinded prior to the date the governor signs the act (May 27, 2008).

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