Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
16.505(26),
16.576(4),
61.510(27),
61.645(9)(g),
61.701,
61.702,
78.510(26),
26 U.S.C.
105(b),
115,
213(d),
Pub.L.
111-148
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
61.645(9)(g) requires the
Board of Trustees of Kentucky Retirement Systems to promulgate all
administrative regulations necessary or proper in order to carry out the
provisions of
KRS
61.515 to
61.705,
16.510
to
16.652,
and
78.520
to
78.852.
KRS
61.701(6) authorizes the
board to promulgate administrative regulations to ensure the income of the
Kentucky Retirement Systems Insurance Fund is exempt from taxation under Title
26 of the United States Code.
KRS
61.702 requires the board to promulgate
administrative regulations concerning requirements for a medical insurance
reimbursement program. This administrative regulation establishes procedures
for the administration of the Kentucky Retirement Systems health and hospital
insurance benefits, as well as establishing eligibility requirements, necessary
documentation for proof of insurance, deadlines for filing for reimbursement,
and forms.
Section 1. Definitions.
(1) "Dependent child", as used in
KRS
61.702(4), is defined by
KRS
16.505(17).
(2) "Monthly contribution rate" means:
(a) The amount determined by the board as the
maximum contribution the retirement systems will pay toward the health
insurance premium of a retiree whose membership date is on or before June 30,
2003, including retirees who were hired by a participating agency prior to June
30, 2003, and who established a membership date between July 1, 2003, and July
12, 2004; or
(b) For a retiree
whose membership date is on or after July 1, 2003, the amount per month earned
by the retiree based on years of service as provided in
KRS
61.702(8).
(3) "Recipient" is defined by
KRS
61.510(27).
Section 2. Trust Fund.
(1) Pursuant to
KRS
61.701, fund assets shall be dedicated for
use toward health benefits, as provided in
KRS
61.702, and as permitted under
26 U.S.C.
105 and
106
of the United States Internal Revenue Code, to retired recipients and employees
of employers participating in the Kentucky Employees Retirement System, County
Employees Retirement System, and State Police Retirement System. Certain
dependents or beneficiaries shall be included, such as qualified beneficiaries
as described in 42 U.S.C. 300bb-8(3) of the United States Public Health Service
Act.
(2) The board shall manage the
assets of the trust fund in accordance with
KRS
61.701(3).
(3) Employers participating in the trust fund
shall be limited in accordance with
KRS
61.701(4).
(4) If the trust fund is terminated, the
assets in the trust fund may revert to the participating employers, in
accordance with
KRS
61.701(5).
(5) The board of trustees may adopt a trust
agreement and take all action authorized by
KRS
61.701(6).
Section 3.
(1) A person shall not be eligible to
participate in the group health plans administered by Kentucky Retirement
Systems until the person is a recipient of a monthly retirement allowance as
defined in
KRS
16.505(26),
61.510(27),
or
78.510(26),
except as provided in
KRS
16.576(4).
(2) A person who retires under disability
retirement shall not be eligible to participate in the group health plans
administered by Kentucky Retirement Systems until the month the person receives
the person's first monthly retirement allowance payment.
(3) A recipient's spouse or dependent shall
not be eligible to participate in one (1) of the group health plans
administered by Kentucky Retirement Systems unless the recipient is
participating in one (1) of the group health plans administered by Kentucky
Retirement Systems.
(4) An
alternate payee shall not be eligible for participation in the group health
plans administered by Kentucky Retirement Systems.
Section 4.
(1) The board shall adopt monthly
contribution rates as follows:
(a) Hazardous
Medicare eligible coverage;
(b)
Nonhazardous Medicare eligible coverage;
(c) Hazardous non-Medicare eligible coverage;
and
(d) Nonhazardous, non-Medicare
eligible coverage.
(2)
The board may adopt separate contribution rates for tobacco and non-tobacco
users.
Section 5.
(1) A recipient, spouse, or dependent who is
Medicare eligible shall not participate in the non-Medicare eligible group
health plan offered through Kentucky Retirement Systems.
(2) A recipient, spouse, or dependent who is
not Medicare eligible shall participate in the non-Medicare eligible group
health plan offered through Kentucky Retirement Systems, unless the recipient,
spouse, or dependent waives participation in the non-Medicare eligible group
health insurance plan in writing.
(3) If a recipient, spouse, or dependent is
eligible for Medicare but the other persons enrolled in the group health plan
are not, then the recipient, spouse, or dependent who is not eligible for
Medicare may continue to participate in the non-Medicare eligible group health
plan offered through Kentucky Retirement Systems.
Section 6.
(1) The monthly contribution rate paid by
Kentucky Retirement Systems towards health insurance premiums for a recipient
shall not exceed the monthly contribution rate to which the recipient is
entitled under
KRS
61.702.
(2) A retiree who is not eligible for
coverage based on hazardous service and who is receiving more than one (1)
monthly retirement allowance from one (1) of the plans administered by Kentucky
Retirement Systems shall not receive more than the single monthly contribution
rate for the plan chosen by the recipient.
(3) A retiree who retired based on
reciprocity with any of the state-administered retirement systems shall only
receive the monthly contribution rate to which the retiree is entitled based on
the retiree's service credit with the retirement systems administered by
Kentucky Retirement Systems.
(4)
Pursuant to
KRS
61.702(4)(b), funds from the
insurance trust fund or the 401(h) accounts provided for in
KRS
61.702(2)(b) shall be used
to pay a percentage of the monthly contribution rate for family coverage for
the spouse and each dependent child as defined in
KRS
16.505(17).
Section 7.
(1)
(a) If
the retirement system utilizes the group health insurance provided by the
Kentucky Department of Employee Insurance to provide health insurance coverage
for its non-Medicare eligible recipients, then the retirement system shall
provide recipients with the forms required by the Kentucky Department of
Employee Insurance for enrollment, waiver, or changes to the group health plan
for recipients of a monthly retirement allowance from any of the
state-administered retirement systems.
(b) The retirement systems shall provide the
Form 6200, Kentucky Retirement Systems Medicare Eligible Insurance Enrollment
Form to Medicare eligible recipients.
(2)
(a) The
board shall adopt a default plan in which a recipient who did not submit an
insurance form shall be enrolled.
(b) If the recipient fails to submit an
insurance form to the retirement office by the last day of the month prior to
the month the initial retirement allowance is paid, the recipient shall be
automatically enrolled in the plan adopted by the board as the default
plan.
(c) If the recipient fails to
submit an insurance form to the retirement office by the last day of the month
the recipient becomes eligible for Medicare, the recipient shall be
automatically enrolled in the plan adopted by the board as the default
plan.
Section
8.
(1) The recipient of health
and hospital insurance whose premium exceeds the recipient's monthly retirement
allowance shall pay the balance of the health insurance premium to the
retirement systems monthly by electronic transfer of funds.
(2) The recipient shall execute a Form 6131,
Bank Draft Authorization for Direct Pay Accounts.
(3)
(a) If
a recipient fails to remit the balance of the health insurance premium by the
date provided on the invoice, then the recipient's enrollment in the group
health plan provided by the retirement systems shall be cancelled the month
after the last month the recipient paid the premium.
(b) If a recipient's health insurance
coverage is cancelled pursuant to this section, the recipient shall not be
eligible to enroll in the group health insurance plan provided by the
retirement systems until the next open enrollment period for health insurance
coverage.
Section
9.
(1) A recipient may
participate in the medical insurance reimbursement plan if the recipient lives
in an area outside of the coverage of the group health plan provided by the
retirement systems and is:
(a) A retired
member of one (1) of the systems administered by Kentucky Retirement
Systems;
(b) The beneficiary of a
retired member with hazardous service in one (1) of the systems administered by
Kentucky Retirement Systems; or
(c)
The beneficiary of a retired member with service as a member of the General
Assembly.
(2) The
reimbursement plan shall be available in any month the recipient is not
eligible for:
(a) In-network benefits through
a health provider offered through the state group medical insurance
administered by the Commonwealth of Kentucky; or
(b) Coverage under an indemnity plan offered
to and providing the same payments for medical services to retired members
residing in Kentucky.
(3) Medical insurance premiums eligible for
reimbursement shall be the premiums for hospital and medical coverage paid for
by the eligible recipient up to the applicable monthly contribution
rate.
(4) An eligible recipient
shall file a Form 6240, Application for Medical Insurance Reimbursement at the
retirement office with one (1) or more of the following as proof of payment for
hospital and medical insurance premiums:
(a) A
copy of the invoice from the insurance company and copy of the receipt of
payment;
(b) A copy of the invoice
from the insurance company and copy of the front and back of the cancelled
check made out to the insurance company;
(c) A copy of the eligible recipient's pay
stub if the pay stub clearly shows a deduction for hospital and medical
insurance;
(d) A statement from the
eligible recipient's employer listing dates and amounts of premiums deducted
from wages;
(e) A copy of a bank
statement showing deductions for hospital and medical insurance if the
statement clearly indicates payment to a company that provides only hospital
and medical insurance;
(f) A copy
of a bank statement showing deductions to an insurance company along with a
statement from the insurance company listing dates and amounts of premiums;
or
(g) Other documentation which is
necessary to prove payment for hospital or medical insurance.
(5) An eligible recipient shall
file a Form 6240, Application for Medical Insurance Reimbursement each calendar
year for reimbursement. An eligible recipient may file a Form 6240, Application
for Medical Insurance Reimbursement each quarter of a calendar year for
reimbursement.
(6) If the eligible
recipient files a completed Form 6240, Application for Medical Insurance
Reimbursement and the required proof, the eligible recipient shall be
reimbursed on the following schedule:
(a) In
May, if the documentation is filed at the retirement office by April
20;
(b) In August, if the
documentation is filed at the retirement office by July 20;
(c) In November, if the documentation is
filed at the retirement office by October 20; or
(d) In February, if the documentation is
filed at the retirement office by January 20.
(7) The retirement system shall not reimburse
an eligible recipient for premiums for a calendar year if the eligible
recipient fails to file at the retirement office a Form 6240, Application for
Medical Insurance Reimbursement and required proof by March 20 of the following
calendar year.
(8) The retirement
system may verify the recipient's eligibility for reimbursement for hospital
and medical insurance by requesting verification of coverage and payments
directly from the insurance company indicated on the Form 6240, Application for
Medical Insurance Reimbursement.
(9)
(a) If a
recipient receives a payment from the retirement system which does not qualify
as a medical insurance premium reimbursement, the recipient shall return the
payment to the retirement system.
(b) If the recipient fails to return the
payment, the retirement systems may withhold the payment from the recipient's
monthly retirement allowance payment.
Section 10. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) The "Kentucky Retirement
Systems Insurance Fund Trust Agreement", dated August 21, 2008;
(b) Form 6131, "Bank Draft Authorization for
Direct Pay Accounts", September 2014;
(c) Form 6240, "Application for Medical
Insurance Reimbursement," July 2011; and
(d) Form 6200, "Kentucky Retirement Systems
Medicare Eligible Insurance Enrollment Form," September 2014.
(2) This material may be
inspected, copied, or obtained, subject to applicable copyright law, at the
Kentucky Retirement Systems, Perimeter Park West, 1260 Louisville Road,
Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.
STATUTORY AUTHORITY:
KRS
61.645(9)(g),
61.701(6),
61.702