| 1 | A bill to be entitled |
| 2 | An act relating to retiree health insurance subsidy; |
| 3 | amending s. 112.363, F.S.; revising provisions for |
| 4 | determination of the amount of the subsidy for retirees of |
| 5 | the defined benefit program and eligible participants of |
| 6 | the Public Employee Optional Retirement Program of the |
| 7 | Florida Retirement System or their beneficiaries; |
| 8 | providing a cost-of-living adjustment for the subsidy; |
| 9 | revising the contribution paid by employers of state- |
| 10 | administered retirement plans; providing a finding of |
| 11 | important state interest; providing an effective date. |
| 12 |
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| 13 | Be It Enacted by the Legislature of the State of Florida: |
| 14 |
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| 15 | Section 1. Paragraphs (f) and (g) are added to subsection |
| 16 | (3) of section 112.363, Florida Statutes, and paragraph (g) is |
| 17 | added to subsection (8) of said section, to read: |
| 18 | 112.363 Retiree health insurance subsidy.-- |
| 19 | (3) RETIREE HEALTH INSURANCE SUBSIDY AMOUNT.-- |
| 20 | (f)1. Beginning January 1, 2006, each eligible retiree of |
| 21 | the defined benefit program of the Florida Retirement System, |
| 22 | or, if the retiree is deceased, his or her beneficiary who is |
| 23 | receiving a monthly benefit from such retiree's account and who |
| 24 | is a spouse or a person who meets the definition of a joint |
| 25 | annuitant in s. 121.021(28), shall receive a monthly retiree |
| 26 | health insurance subsidy payment equal to the number of years of |
| 27 | creditable service, as defined in s. 121.021(17), completed at |
| 28 | the time of retirement multiplied by $7; however, no eligible |
| 29 | retiree or beneficiary may receive a subsidy payment of more |
| 30 | than $210 or less than $42. If there are multiple beneficiaries, |
| 31 | the total payment must not be greater than the payment to which |
| 32 | the retiree was entitled. The health insurance subsidy amount |
| 33 | payable to any person receiving the retiree health insurance |
| 34 | subsidy payment on January 1, 2005, shall not be reduced solely |
| 35 | by operation of this subparagraph. |
| 36 | 2. Beginning January 1, 2006, each eligible participant of |
| 37 | the Public Employee Optional Retirement Program of the Florida |
| 38 | Retirement System who has met the requirements of this section, |
| 39 | or, if the participant is deceased, his or her spouse who is the |
| 40 | participant's designated beneficiary, shall receive a monthly |
| 41 | retiree health insurance subsidy equal to the number of years of |
| 42 | creditable service, as provided in this subparagraph, completed |
| 43 | at the time of retirement multiplied by $7; however, no eligible |
| 44 | retiree or beneficiary may receive a subsidy payment of more |
| 45 | than $210 or less than $42. For purposes of determining a |
| 46 | participant's creditable service used to calculate the health |
| 47 | insurance subsidy, a participant's years of service credit or |
| 48 | fraction thereof shall be based on the participant's work year |
| 49 | as defined in s. 121.021(54). Credit shall be awarded for a full |
| 50 | work year whenever health insurance subsidy contributions have |
| 51 | been made as required by law for each month in the participant's |
| 52 | work year. In addition, all years of creditable service retained |
| 53 | under the Florida Retirement System defined benefit program |
| 54 | shall be included as creditable service for purposes of this |
| 55 | section. |
| 56 | (g) Beginning January 1, 2007, and each January 1 |
| 57 | thereafter, the health insurance subsidy shall be adjusted by a |
| 58 | cost-of-living factor. The adjusted monthly health insurance |
| 59 | subsidy for retirees and annuitants will equal the health |
| 60 | insurance subsidy paid in the month prior to the adjustment plus |
| 61 | an amount equal to 3 percent of the prior month's health |
| 62 | insurance subsidy. |
| 63 | (8) CONTRIBUTIONS.--For purposes of funding the insurance |
| 64 | subsidy provided by this section: |
| 65 | (g) Beginning January 1, 2006, the employer of each member |
| 66 | of a state-administered retirement plan shall contribute 1.56 |
| 67 | percent of gross compensation each pay period. |
| 68 |
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| 69 | Such contributions shall be submitted to the Department of |
| 70 | Management Services and deposited in the Retiree Health |
| 71 | Insurance Subsidy Trust Fund. |
| 72 | Section 2. The Legislature finds that a proper and |
| 73 | legitimate state purpose is served when employees and retirees |
| 74 | of the state and of its political subdivisions, and the |
| 75 | dependents, survivors, and beneficiaries of such employees and |
| 76 | retirees, are extended the basic protections afforded by |
| 77 | governmental retirement systems that provide fair and adequate |
| 78 | benefits that are managed, administered, and funded in an |
| 79 | actuarially sound manner, as required by s. 14, Art. X of the |
| 80 | State Constitution and part VII of chapter 112, Florida |
| 81 | Statutes. Therefore, the Legislature determines and declares |
| 82 | that this act fulfills an important state interest. |
| 83 | Section 3. This act shall take effect July 1, 2005. |