Legislature(2017 - 2018)HOUSE FINANCE 519
01/26/2017 05:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB23 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 23 | TELECONFERENCED | |
HOUSE BILL NO. 23
"An Act relating to major medical insurance coverage
under the Public Employees' Retirement System of
Alaska for certain surviving spouses and dependent
children of peace officers and firefighters; and
providing for an effective date."
Co-Chair Foster reported that Representative Wilson was
excused.
5:32:57 PM
Co-Chair Foster announced that public testimony would be
heard Wednesday, February 1. He asked members to submit
their amendments by the following Friday at 5:00 p.m.
Co-Chair Seaton MOVED to ADOPT the proposed committee
substitute (CS) for HB 23, Work Draft (30-LS0258\O). There
being NO OBJECTION, it was so ordered.
5:34:28 PM
REPRESENTATIVE ANDY JOSEPHSON, SPONSOR, indicated he would
provide some background on the bill. The background, as
Representative Chuck Kopp had stated the day before on the
floor in a special order, could be traced to the
territorial days and earlier. There had been 70 officers
who had lost their lives serving the public. What prompted
the more recent legislative action was a spate of tragic
deaths of officers in the line of duty. In terms of the
legislative history, after the deaths of the troopers in
Tanana, Governor Sean Parnell made an administrative fix.
Additionally, Representative Josephson proposed HB 3, which
tracked Governor Parnell's efforts; and Representative
Charisse Millet proposed HB 66, which became the vehicle
that ultimately passed [the House] in mid-June, 34-0. There
had thus far been 9 committee hearings. The most recent
bill was HB 4002 when Representative Millet's bill was
withdrawn, and that bill became the vehicle that passed in
the 4th special session in the 29th Legislature.
Representative Millet had conducted special hearings. A
working group was created, including a number of assistant
attorneys general and, he believed, Senator John Coghill,
Representative Millet, and most recently, his office. He
read from a prepared statement:
Police officers and firefighters are unique in that
their job description requires that they run to danger
and put their lives at risk to save ours.
Tragically, this sometimes results in their death.
Most recently, Allen Brandt became Alaska's 49th
police officer to be murdered in the line of duty. In
2014, Alaska Troopers Scott Johnson and Gabe Rich were
shot and killed in the line of duty in Tanana. Just
months ago, Arn Salao, an Anchorage police officer,
was shot five times. That he survived is nothing short
of a miracle.
I also think about the recent spate of police officers
killed in the line of duty in the Lower 48; including
a young woman and a man near retirement age in Palm
Springs, the deaths of five police officers in Dallas,
and the killing of officers in Baton Rouge. In 2015,
123 police officers were killed in the line of duty in
the U.S.
These officers are a part of a brotherhood/sisterhood
with our own fallen heroes here in Alaska. They are
all deserving of our respect and gratitude.
But respect and gratitude won't help the families who
are left to cope, not just with the loss of their
loved one, but also with the loss of health security.
As part of our social compact, we owe more to the
police officers and firefighters who risk facing
danger just by going to work. At the least, we owe
them the assurance that their families will be cared
for if the worst happens.
Currently, we rely on patchwork solutions with the
state and municipalities covering survivors' health
premiums on an ad hoc basis. What we need is a real
fix that is predictable and long-lasting, and
reflecting a genuine policy of care.
That is the aim of the proposed committee substitute
to HB 23. The bill will ensure that surviving
dependents' health insurance premiums are paid by
either the state or by municipal employers, or a
combination of both.
The original version of HB 23 would have covered some
survivors through the state retirement system known as
PERS. The proposed substitute was developed based on a
concept developed by an administration working group
that met during the interim and that recently worked
with my staff.
Under the PERS approach, survivors were offered
coverage more suited to an older generation of
recipients. The substitute will continue the
survivors' health care coverage at the same level that
applied at the officer or fire fighters' death -
coverage more suited to young families.
Though the final decisions belong to this committee
and the legislature as a whole, I made certain choices
for the committee substitute before you. One decision
was whether to require municipalities to cover local
police officers and fire fighters.
This was an easy decision for me. Anchorage has more
police officers than there are state troopers and I
want to know their families and families in other
communities will have the same benefits as state
employees.
5:41:05 PM
In addition, under the PERS proposal, 47
municipalities who participate in PERS would have
covered their employees' survivors' health insurance.
If we simply decided not to use PERS, we would drop
those employees that the House saw covered by a vote
of 34-0 in June 2016 on a bill similar to the original
proposal in HB 23.
Representative Josephson explained that the working group
concluded that the Public Employees' Retirement System
(PERS) system was not the preferred method. According to a
review of minutes of the past nine hearings, as well as
media coverage, there had been push-back about "opening up
PERS." The current bill used a claims concept, with a trust
fund created within the Department of Public Safety (DPS),
overseen by the Department of Administration, rather than
an actuarial method. He stated that the CS was not a PERS
bill. He explained that PERS used a definition for peace
officers and fire fighters that covered certain people in
the statute, which included a number of jobs. However, he
continued, there were police officers, first responders,
and line of duty employees who were not in PERS. The PERS
model was not perfect to begin with. He stated that there
were police officers, for example, in the city of
Fairbanks, who were not in PERS. They had their own
retirement system. He did not know how this came about. He
was sure that former mayor of Fairbanks, Representative
Thompson, knew all about it. He thought that the bill would
shrink and really target the line of duty. He stated that
they would be using a definition for police officer, not
peace officer. He thought the bill really hit the value
statement that the legislature wanted to make, that
involved the first responders, the line of duty folks. He
mentioned that there were officers in the Lower 48 who were
killed while sitting behind their desks, and who would
probably not be covered under this bill.
Representative Josephson continued to read a prepared
statement:
Because smaller municipalities will be more impacted
by the requirement to pay survivors' premiums, the
proposed substitute provides for the state to cover 50
percent of the premiums if the worse happens and a
community loses one of their own.
Representative Josephson further explained that there are
communities that have sworn officers, such as Hoonah, which
lost two police officers, but could not easily cover the
claims brought by the survivors. The bill asked for the
state to help to the tune of 50 percent of those cities'
costs. He added that this social compact, this value
statement, would cost between $170,000 and $200,000, and
that the municipalities' obligations would be somewhat
comparable. He detailed that communities with their own
police officers (e.g. Nome) would pay nothing if they did
not lose an officer. The burden was restricted.
He continued to read from the prepared statement.
This is the 10th hearing on this subject in this body.
I can only imagine the effect on employee morale and
the alternative reality if no benefit is offered. I
hope that we can finally join with 14 other states and
get this important matter decided. It is time we gave
substance to our appreciation for the invaluable work
that first responders and line-of-duty employees
engage in every day.
5:46:38 PM
Representative Josephson, in reading through the minutes of
previous meetings, saw that there had been a lot of
discussion about PERS, and the body asked about the fact
that the Clerk I position would not receive this coverage.
He stated that there was a memo from Megan Wallace,
Legislative Legal Services, dated mid-June [2016], in which
she says with some confidence that the proposal was an
economic interest and therefore the courts would say that
the difficulties of going into the field with loaded
assailants in front of them rendered these employees more
prone to suffer the ultimate price. He surmised that there
was no equal protection problem. One of the assistant
attorneys general said the same thing in June of the
previous year, albeit for a different bill. He thought the
logic carried over to the present CS.
5:48:10 PM
Representative Thompson clarified that the police and fire
fighters in Fairbanks were under the PERS system and always
had been.
Representative Josephson stated that his office had been
told that either the City of Fairbanks or the borough was
not a member of PERS.
Representative Thompson indicated that the City of
Fairbanks police and fire fighters were covered but that
the borough was likely not covered with volunteer fire
departments. He referred to an email from the Department of
Fish and Game stating that it had lost 27 of its people in
the field, more than the 16 lost by the State Troopers.
(copy on file). He asked how those people would be covered.
Representative Josephson thought that with a fiscal plan
those people could also be covered. He mentioned a
demarcation for people who "run to harm." He suggested
that it was a policy call. He conveyed that the impetus was
the deaths of Officers Johnson and Rich, and the consensus
was based on the line of duty.
Co-Chair Foster indicated that there were people available
to answer questions.
5:51:46 PM
Representative Thompson asked how many municipalities in
the state had a population of under 10,000. He remarked
that a municipality was an organized, chartered community.
For example, the City of Delta Junction had a fire
department. The city was not a municipality, but it did
have fire fighters who were paid. He wondered where the
line would be drawn in those situations.
Representative Josephson suggested that the representative
perhaps offer an amendment proposed from the Department of
Law that would better clarify that the bill was meant to
cover full-time sworn officers and fire fighters. He
understood that there were certain ambiguities. He stated
that because there were about 50 communities under the PERS
system, there were about 157 total communities, and many
had a police force but were not in the PERS system. He
thought the representative would find that the fiscal note
would present a very modest cost.
Representative Thompson asked if the municipality was
liable for retroactivity and for officers in the past.
5:54:17 PM
Representative Josephson thought the answer was no. He
thought that the CS was a prospective bill. He recalled the
death of an officer in a helicopter crash. He thought that
generally the government entities had done the honorable
thing, but that it was better to have a system in place.
Representative Guttenberg was a little troubled by the
process of buying insurance instead of fulfilling the PERS
obligation to get people to the end of the day. He stated
that he had been dwelling on the issue for several months.
He wondered if Representative Josephson had considered
setting up a fund such that every municipality contributed
to it to cover every employee, regardless of job
classification. He recalled Officer Johnson, who was well
past 20 years [of service], nearing 25, and just fulfilling
that obligation to the point when he would have normally
retired. He suggested that not every employee charging into
the line of fire was a police officer or a fire fighter,
for example in the case of an accident. He wondered where
it was necessary to draw the line. He thought it was
possible to cover PERS obligations for everyone who lost
their lives in the line of duty by setting up a separate
fund.
5:57:25 PM
Representative Josephson was looking for a response in the
minutes. He was not aware of a system set up to collect a
PERS share for someone who was no longer an employee as
they were deceased.
LISA WEISSLER, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
recounted that in building the CS, the discussion included
an actuarially calculated fund. The decision in version O
had been to make it needs-based. In that way the
communities' funds would not be tied up. She hoped the
amount needed would be small. There were other problems
with the PERS system. For example, it wouldn't make it
available to communities that did not participate in PERS.
For a dependent to be covered, there had to a surviving
spouse. It would not have covered a single employee who
died in the line of duty who had a child. The fund was
developed to be more flexible and to cover other
situations.
Representative Guttenberg remarked that the committee was
writing policy and could make such decisions.
5:59:55 PM
Representative Kawasaki thanked Representative Josephson
for bringing the bill forward. He noted there had been
questions brought before the finance committee at an
earlier time about whether Village Public Safety Officers
(VPSOs) could be covered at the same level. He asked him to
comment.
Representative Josephson responded that he was very
disturbed by what had happened to Officer Madole. There had
been discussion about adding VPSOs. The exception was that
they were funded through non-profit regional corporations.
He elaborated that VPSOs are linked to the DPS and undergo
training in Sitka. He thought that there may be exceptions
to this. He thought VPSOs' work was critical and that they
needed their day before the legislature; however, the bill
did not address the issue.
Representative Kawasaki asked about the payout for small
municipalities and asked why the number was set at 10,000.
He wondered if it had to do with a municipality being able
to contribute.
Representative Josephson responded that small communities
were concerned about the ability to "pony up" the entire
expense.
Co-Chair Foster acknowledged Representative Chuck Kopp in
the audience.
6:02:56 PM
Ms. Weissler responded that the 10,000 number came from a
discussion with the Alaska Municipal League (AML). She
thought that there were around 8 communities above 10,000.
Representative Kawasaki indicated that the majority of the
versions of the bill had a retroactivity clause. The
current legislation did not appear to have such a clause
but had an immediate effective date. He asked whether it
was open to any previous officer or their family. If so, he
wondered what the total number would be.
Representative Josephson deferred to Ms. Weissler.
6:04:19 PM
Ms. Weissler reported that the effective date came from the
administration. She believed that families currently in the
situation were being covered, and should the bill pass they
would be eligible to apply for continuing coverage from
either the state or the municipality.
Representative Kawasaki commented that the language
appeared to state that anyone previous to that date could
also become eligible as they would fit the criteria laid
out by the commissioner of DPS.
Ms. Weissler called upon a lifeline to comment.
Co-Chair Foster wondered if someone from the administration
was available to comment.
6:05:44 PM
JOAN WILKERSON, ATTORNEY, CIVIL DIVISION, DEPARTMENT OF
LAW, turned to page 4, Section 5 of the CS and stated that
the act would take effect on July 1, 2017. As anticipated,
a person needing these benefits could apply, and if they
established eligibility, could be considered for coverage.
One of the mandates necessary for establishing eligibility
was whether a person had access to medical insurance
already. If someone already had medical benefits such as
retirement benefits, and did not need additional insurance,
then they would not be eligible. The CS deliberately did
not have a retroactive impact, but there was not a cut-off
date.
6:07:22 PM
Representative Pruitt referred to the previous year. There
had been concerns with the actual makeup of the bill. He
appreciated the work done over the interim. He thought the
bill delivered what the legislature wanted. He wanted to
understand if the intent of the legislation was to provide
for the family member for life or to act as a transition or
bridge towards whatever was in their future. He asked what
the legislation was trying to accomplish.
6:09:25 PM
Representative Josephson stated that he had a 1-year
solution, as had Governor Parnell. He believed that
Representative Millet's proposal had a time limit, around
23 or 26 years-of-age for the children, with Medicare
eligibility for the spouse, or perhaps in the event that
there was other coverage available. Previously the finance
committee had accepted a 10-year limit. The current bill
did not have that. It would cover widows or widowers until
there was other coverage, upon which they would no longer
be eligible. This took into account the Affordable Care Act
and the date in the federal law of 2026.
Representative Josephson added that the 10-year limit had
problems, such as in the case of an unborn or 1-year-old
child, who would lose coverage at the age of 11.
6:11:23 PM
Representative Pruitt thought that the year 2026 made
sense. There was a timeframe in which a transition had been
allowed to take place. He asked Representative Josephson
whether he would be willing to talk about a transition
timeframe for as long as a surviving family member would
take to move forward with their lives.
Representative Josephson thought there was an argument for
the timeframe to be longer. He referred to officers' wives
testifying that on the 31st of the month in which their
spouse fell in the line of duty, they had lost their
insurance. He commented on the possibility of them simply
getting a life insurance policy. He felt that the
legislation created a special privilege that he thought
should be afforded to the families because their spouses
paid the ultimate price. He pointed out that a $100,000
policy payment would not help much in the event of four
children, aged 2, 4, 6 and 8.
6:14:22 PM
Representative Pruitt thought there was an understanding
that it was not about providing but was a discussion
regarding the point at which the state felt it had
fulfilled its responsibility. He moved to the discussion
about municipality contribution. He understood that a
community like Anchorage would make a contribution of 100
percent, while a smaller community would make a
contribution of 50 percent. He felt that making the
contribution mandatory could be a problem.
Representative Josephson responded that AML was celebrating
the legislation. He asked Representative Pruitt to repeat
his question.
Representative Pruitt was unclear whether the legislature
could mandate contributions from municipalities.
Representative Josephson answered that the Department of
Law was currently examining that very question.
Ms. Wilkerson added that the department had received the CS
late in the day and would prefer to review the bill and
come back with the information. She specified that she
specialized in retirement and benefits and that the
assistant attorney general who specialized in municipal law
was working on the question and would give answers as soon
as possible.
Representative Pruitt assumed the fiscal notes were
attached to the previous version of the CS and not to the
version before the committee.
Co-Chair Foster said that he would check but thought that
his assumption was correct.
6:17:46 PM
Co-Chair Seaton asked if, as on page 3, line 3, "in the
line of duty" included people on call 24 hours per day.
Representative Josephson thought that it would, but needed
clarification on the question.
Co-Chair Seaton was trying to find out if 24 hour on call
duty was included in the scope of the language.
6:19:11 PM
Representative Josephson responded that if he were going to
defend someone in court who had been denied a benefit, he
would probably not use the term "line of duty," but he
would have to exclude paragraph 4 and say that his late
client was not willfully negligent. He agreed that
subparagraph 3, line 3, page 3 was fundamental.
Co-Chair Seaton asked Representative Josephson to come back
to the committee on the exact parameters of the CS. Co-
Chair Seaton referred to page 3, line 10. He asked whether
"becomes eligible to receive…" referred to a spouse who
remarried and could get insurance through the spouse's
coverage, and whether that would be deemed "becoming
eligible to receive major medical benefits…" or whether it
referred to contracted major medical insurance.
Representative Josephson thought it would mean that if a
person was eligible for insurance then the benefit would
cease. The benefit in the bill was full, so he thought that
a spouse's coverage would render them ineligible. He
believed the issue was a matter of debate.
6:21:43 PM
Co-Chair Seaton gave the example of a husband and father of
young children who was killed in the line of duty.
Consequently, the mother became eligible for Denali
KidCare. He asked whether that eligibility for the Medicaid
coverage under Denali KidCare, which the state provided,
would be the prime eligibility, and whether the current CS
would no longer apply.
Representative Josephson deferred to his colleagues.
Co-Chair Seaton stated that he was simply putting the
questions on the table.
Ms. Wilkerson responded that as per page 3 of the CS, the
dependent child would be eligible for alternative insurance
and would therefore qualify for the other insurance [i.e.
Denali KidCare], but the surviving spouse would not be
covered through Denali KidCare and would still be eligible
for insurance.
Co-Chair Seaton thought that Denali KidCare covered the
parents of eligible children as well.
Ms. Wilkerson apologized that she was not adequately
familiar with that coverage and thought that it was only
for children.
Co-Chair Seaton pointed to page 3, line 12 of the CS and
asked about the language regarding Medicare eligibility and
the age of 65. He thought that the language "Medicare
eligible age" should be included as it depended upon when a
person was born and that the Medicare-eligible age was
progressing and could be 67 or a different age.
6:24:36 PM
Representative Ortiz asked if during the discussions they
had considered prorating that smaller community number even
further, for example at 5,000 it went to 25 percent.
Ms. Weissler responded that the solution had come up
recently. They had struggled with the notion of requiring
municipalities to cover their employees and recognized the
problems for small communities. The idea in the CS was just
one way to mitigate the impact. She suggested that there
could be three tiers, but that that was a policy decision.
Co-Chair Foster would be setting the bill aside. He asked
that amendments be submitted by Friday, February 3.
HB 23 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the agenda for the following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 23 CS WorkDraft vO.pdf |
HFIN 1/26/2017 5:30:00 PM |
HB 23 |
| HB 23 Mark Stopha letter.pdf |
HFIN 1/26/2017 5:30:00 PM |
HB 23 |
| HB023 Sectional Analysis ver O 1.26.17.pdf |
HFIN 1/26/2017 5:30:00 PM |
HB 23 |
| HB023 Sponsor Statement 1.24.17.pdf |
HFIN 1/26/2017 5:30:00 PM |
HB 23 |
| HB023 Supporting Document-Background ver O.26.17.pdf |
HFIN 1/26/2017 5:30:00 PM |
HB 23 |