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1999 SESSION


VIRGINIA ACTS OF ASSEMBLY -- CHAPTER
An Act to amend and reenact §§ 2.1-20.1:2 and 51.1-600 of the Code of Virginia and to amend the Code of Virginia by adding in Chapter 2 of Title 2.1 a section numbered 2.1-20.1:5 and in Chapter 6 of Title 51.1 a section numbered 51.1-606, relating to benefits for state employees; deferred compensation plans; participation in the state retiree health benefits program; health insurance credits for retired state employees.
[H 1756]
Approved

Be it enacted by the General Assembly of Virginia:

1. That §§ 2.1-20.1:2 and 51.1-600 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding in Chapter 2 of Title 2.1 a section numbered 2.1-20.1:5 and in Chapter 6 of Title 51.1 a section numbered 51.1-606 as follows:

§ 2.1-20.1:2. Health insurance credits for retired state employees.

A. The Commonwealth shall pay the cost of coverage for A state employees employee, as defined in § 2.1-20.1, retired under the Virginia Retirement System, State Police Officers Retirement System, Judicial Retirement System or any retirement system authorized pursuant to § 51.1-126 who (i) rendered at least fifteen years of total creditable service under the Retirement System or (ii) rendered service as a temporary employee of the General Assembly in 1972 and became a member of the retirement system from 1972 to 1985 immediately following such temporary service shall receive a health insurance credit to his monthly retirement allowance, which shall be applied to reduce the retired member's health insurance premium cost. Notwithstanding the preceding, the Medical College of Virginia Hospitals Authority shall pay the cost of coverage for employees of such Authority who (i) retired under the Virginia Retirement System or any retirement system authorized pursuant to §§ 23-50.16:24.1, 51.1-126, 51.1-126.1, or former § 51.1-126.2; (ii) were employed by such Authority prior to July 1, 1998, and were not subsequently rehired by such Authority on or after July 1, 1998; and (iii) served no less than fifteen years of creditable service as regularly employed full-time employees of such Authority or the Commonwealth. An The amount of each monthly health insurance credit payable under this section shall be two dollars and fifty cents per year of creditable service, not to exceed a maximum monthly allowance of seventy-five dollars, which amount shall be credited monthly to any retired state employee participating in the state retiree health plan established by § 2.1-20.1 benefits program pursuant to § 2.1-20.1:5 or a an alternative personal health insurance plan as provided herein. However, such credit shall not exceed the health insurance premium for retiree-only coverage as provided under such alternative personal health insurance plan. Any retired state employee retired under the provisions of §§ 51.1-156 and 51.1-307 shall receive the maximum credit provided by this section. Any member who elects to defer his retirement pursuant to subsection C of §§ 51.1-153, 51.1-205 and or § 51.1-305 shall be entitled to receive the allowable credit provided by this section on the effective date of his retirement.

B. 1. For those retired state employees participating in the state retiree health plan benefits program, such credit shall be applied to the monthly premium deducted from benefits payable to retired state employees in accordance with Chapters 1 (§ 51.1-124.1 et seq.), 2 (§ 51.1-200 et seq.) and 3 (§ 51.1-300 et seq.) of Title 51.1. In the event that either no benefit is payable or the benefit payable is insufficient to deduct the entire health care premium, the payment of the credit shall be determined in the manner prescribed by the Virginia Retirement System. Eligibility for the credit shall be determined in a manner prescribed by the Virginia Retirement System.

2. For those retired state employees electing not electing or eligible to participate in the state retiree health plan benefits program and who purchase an alternative personal health insurance policy from a carrier or organization of his own choosing, such retirees shall be eligible to receive a credit in the amount specified in subsection A. Eligibility for the credit and payment for the credit shall be determined in a manner prescribed by the Virginia Retirement System.

3. A retired state employee who fails to elect to participate in the state health plan within thirty-one days of the effective date of retirement, or who, once having elected to participate, discontinues participation, is barred from participating in the state health plan thereafter.

C. The Virginia Retirement System shall actuarially determine the amount necessary to fund all credits provided by this section to reflect the cost of such credits in the employer contribution rate pursuant to § 51.1-145, and prescribe such terms and conditions as are necessary to carry out the provisions of this section. The costs associated with the administration of the health insurance credit program provided for in this section shall be recovered from the health insurance credit trust fund.

D. Notwithstanding anything contained in this section to the contrary, the Medical College of Virginia Hospitals Authority shall pay the cost of coverage for employees of such Authority who (i) retired under the Virginia Retirement System or any retirement system authorized pursuant to §§ 23-50.16:24.1, 51.1-126, 51.1-126.1, or former § 51.1-126.2; (ii) were employed by such Authority prior to July 1, 1998, and were not subsequently rehired by such Authority on or after July 1, 1998; and (iii) served no less than fifteen years of creditable service as regularly employed full-time employees of such Authority or the Commonwealth.

§ 2.1-20.1:5. Participation in the state retiree health benefits program.

A. As used in this section:

"Involuntarily separated" means separated from state service as the result of any dismissal, requested resignation, or failure to obtain reappointment, excluding a separation resulting from a conviction for a felony or crime involving moral turpitude or dishonesty or a separation related to the job performance or misconduct of the state employee.

"Retiree health benefits program" or "program" means the plan for providing health insurance coverage for retired state employees provided pursuant to subsection E of § 2.1-20.1.

"State employee" has the same meaning as defined in § 2.1-20.1.

"State retiree" means state employee retired under the Virginia Retirement System, State Police Officers' Retirement System, Judicial Retirement System or any retirement system authorized pursuant to § 51.1-126, who is eligible to receive a monthly retirement annuity from the Virginia Retirement System.

B. A state retiree shall be eligible to participate in the retiree health benefits program only if he makes an election to participate in the program either:

1. Concurrently with his application to the Virginia Retirement System for monthly retirement benefits at any time subsequent to the termination of employment with the Commonwealth; or

2. Within thirty-one days following the date of termination of employment with the Commonwealth, whether or not an election is made to receive monthly retirement benefits from the Virginia Retirement System, provided that only state retirees who have been involuntarily separated shall be eligible to make an election under this subdivision.

C. If a state retiree (i) makes an election to participate in the retiree health benefits program pursuant to subdivision B 2 and (ii) the state retiree's coverage under the retiree health benefits program ceases for any reason prior to the date that the state retiree commences to receive monthly retirement annuity payments, the state retiree shall be barred from thereafter making an election under subdivision B 1 to participate in the retiree health benefits program when the state retiree applies for monthly retirement benefits. In addition, except as provided in subsection D, a state retiree who fails to elect to participate in the retiree health benefits program by making an election authorized by subdivision B 1 or B 2, or who, once having elected to participate, discontinues participation, is barred from participating in the retiree health benefits program thereafter.

D. Any state retiree who was involuntarily separated and who on July 1, 1999, is participating in the retiree health benefits program and is receiving monthly retirement annuity payments may elect, by notifying the Virginia Retirement System and the Department of Personnel and Training before September 1, 1999, (i) to cease receiving monthly retirement annuity payments until reapplying for such benefits at a later date and to continue participation in the retiree health benefits program or (ii) to cease both receiving monthly retirement annuity payments and participating in the retiree health benefits program until such time as a concurrent election to apply for both monthly retirement benefits and participation in the program is made under subdivision B 1.

§ 51.1-600. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Act" means the Government Employees Deferred Compensation Plan Act.

"Board" means the Board of Trustees of the Virginia Retirement System.

“Deferred compensation plan” means a plan which allows an employee to elect to defer some portion of income until some stated time in the future; provides that the federal and state income tax on such income will be deferred until the actual receipt of such income; and is established pursuant to the provisions of § 457 of the Internal Revenue Code.

"Employee" means any salaried person, including appointed or elected officials, providing services for the Commonwealth, state agencies, counties, municipalities, or other political subdivisions.

“Qualified participant” means an employee of the Commonwealth with at least twelve consecutive months of service who is making continuous deferrals of at least ten dollars per pay period in a deferred compensation plan.

§ 51.1-606. Contribution to qualified participants.

A. The Department of Accounts, or any agency of the Commonwealth not covered under the central payroll system, shall transfer funds from agency appropriations to the private corporation or institution designated by the Board pursuant to subsection A of § 51.1-602. Those funds shall be credited to an account for each qualified participant in a plan established pursuant to the provisions of § 401(a) of the Internal Revenue Code of 1986, as amended. The funds to be transferred shall be an amount as may be approved by the General Assembly. The funds so credited shall be held, administered and invested as provided for in this chapter and in the plan document adopted for the administration of such contributions.

B. The amount credited on behalf of a qualified participant pursuant to this section shall not exceed fifty percent of the amount that the qualified participant voluntarily contributes or fifty dollars, whichever is less, to the deferred compensation plan established under this chapter.

C. The Board shall have the authority to establish a plan pursuant to § 401(a) of the Internal Revenue Code of 1986, as amended, for the purpose of implementation of this section.

2. That the provisions of this act amending and reenacting § 51.1-600 of the Code of Virginia and adding in Chapter 6 of Title 51.1 of the Code of Virginia a section numbered 51.1-606 shall become effective on January 1, 2000.