Legislature(2017 - 2018)HOUSE FINANCE 519
02/07/2017 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB23 | |
| Amendments | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 23 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | 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."
1:42:28 PM
Co-Chair Foster took control of the gavel. He explained
that the following amendments were technical in nature, and
were offered by himself and Co-Chair Seaton.
^AMENDMENTS
Co-Chair Seaton MOVED to ADOPT Amendment 1, 30-LS0258\O.16
(Wayne, 2/3/17) (copy on file):
Page l, line 2:
Delete "health"
Insert "medical"
Page 1, line 7:
Delete "health"
Insert "medical"
Page 1, line 8:
Delete "health"
Insert "medical"
Page 1, line 12:
Delete "health"
Insert "medical"
Page 1, line 14:
Delete "health"
Insert "medical"
Page 2, line 16:
Delete "health"
Insert "medical"
Page 2, line 23:
Delete "health"
Insert "medical"
Page 2, line 25:
Delete "health"
Insert "medical"
Page 3, line 2:
Delete "health"
Insert "medical"
Page 3, line 20:
Delete "health care"
Insert "medical"
Page 3, line 24:
Delete "health"
Insert "medical"
Representative Wilson OBJECTED for discussion.
Co-Chair Foster explained that Amendment 1 would change the
term "health insurance" to "major medical insurance". He
elaborated that major medical insurance was designed to
cover a person for a full gamut of needs, from a routine
checkup to catastrophic events. He said that basic health
insurance was a cash reimbursement service that could help
pay for some, but not all, types of medical services.
JOAN WILKERSON, CIVIL ATTORNEY, DEPARTMENT OF LAW,
introduced herself. She agreed with Co-Chair Foster's
assessment of the amendment.
Representative Wilson asked whether major medical was
currently available for employees and their families.
Ms. Wilkerson replied that policies varied widely. She said
that health insurance policy was how the department
referred to the active employee plan that covered all state
employees under AS 39 30.091. She said that major medical
was usually in reference to a retiree medical plan.
Representative Wilson queried whether there was a
difference in cost.
Ms. Wilkerson responded that the intent of the amendment
was to find one phrase that would describe the coverage
that was vital to all people covered under the benefit.
Representative Wilson WITHDREW her OBJECTION.
Co-Chair Seaton asked whether Medicaid and Medicare would
be considered major medical.
Ms. Wilkerson replied in the affirmative. She added that
the retiree health benefit plan would be included.
Representative Thompson wanted to be sure that the
amendment did not increase the amount of coverage that a
person would be eligible for by the language change.
1:46:48 PM
Ms. Wilkerson responded that the intention was to describe
a type of plan, not to change the level of care that would
be received.
Representative Tilton asked for verification that the terms
were defined in statute.
Ms. Wilkerson thought she had seen major medical defined,
but she was unable to locate the definition. She believed
that they had been defined in a previously offered
amendment. She said she would provide the definition at a
later date.
There being NO further OBJECTION, Amendment 1 was ADOPTED.
1:48:55 PM
Co-Chair Seaton MOVED to ADOPT Amendment 2, 30-LS0258\O.24
(Wayne, 2/7/17) (copy on file):
Page 1, following line 4:
Insert a new bill section to read:
"* Section 1. AS 37.05.146(c) is amended by adding a
new paragraph to read:
(90) gifts, donations, and other money
received by the Department of Public Safety for the
purpose of paying major medical insurance premiums for
survivors of police officers and firefighters under AS
39.60."
Page 1, line 5:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Page 2, line 2:
Delete "donations and appropriations"
Insert "gifts, donations, and other money"
Page 2, line 3, following "municipality":
Insert "appropriated to the fund"
Page 4, line 26:
Delete "secs. 1 and 2"
Insert "secs. 2 and 3"
Page 4, line 27:
Delete "secs. 1 and 2"
Insert "secs. 2 and 3"
Page 4, line 29:
Delete "Section 3"
Insert "Section 4"
Page 4, line 30:
Delete "sec. 4"
Insert "sec. 5"
Vice-Chair Gara OBJECTED for the purpose of discussion.
Co-Chair Foster explained that the amendment clarified that
the money received by the department to pay the insurance
premiums for state employees, and the through 50 percent
for small municipalities, would be accounted for
separately, and the appropriations for the insurance
payments would be made from the fund.
1:49:48 PM
AT EASE
1:52:44 PM
RECONVENED
Co-Chair Foster rolled Amendment 2 to the bottom of
amendments.
Co-Chair Seaton WITHDREW his motion to move Amendment 2.
1:53:46 PM
Co-Chair Seaton MOVED to ADOPT Amendment 3, 30-LS0258\O.2l
(Wayne, 2/6/17) (copy on file):
Page 3, lines 19 - 31:
Delete all material and insert:
"(e) The amount of a premium payable under
this section must be based on the level of major
medical insurance benefits the deceased employee was
receiving at the time of the employee's death. Payment
of premiums shall be made to the applicable employer-
sponsored major medical insurance provider as follows:
(1) the commissioner shall pay, from
the appropriate account in the fund,
(A) 100 percent for an eligible
surviving dependent of a deceased state employee;
(B) 50 percent for an eligible
surviving dependent of deceased employee of a small
municipality; and
(2) a large municipality shall pay 100
percent for an eligible surviving dependent of a
deceased employee of that municipality.
(3) A small municipality shall pay 50
percent for an eligible surviving dependent of a
deceased employee of that small municipality."
Page 4, line 11, following "AS 39.60.010;":
Insert a new paragraph to read:
"(7) "large municipality" means
a municipality with a population of 10,000 or more
according to the latest figures of the United States
Bureau of the Census;"
Renumber the following paragraphs accordingly.
Page 4, line 14, following "10,000":
Insert "according to the latest figures of the
United States Bureau of the Census"
Vice-Chair Gara OBJECTED for the purpose of discussion.
Co-Chair Foster stated that the amendment clarified the
level of health insurance benefits that would be maintained
for the survivors of state employees, how the payments of
the premiums would be made, and that the definitions of
small and large municipality would be based on the latest
figures of the U.S. census.
Co-Chair Seaton wondered whether the definition of "large
municipality" was based on the census numbers from the time
a person died. He was curious about the 100 percent to 50
percent change in coverage over the life of the surviving
spouse.
Co-Chair Foster noted Representative Kawasaki had joined
the meeting.
Ms. Wilkerson deferred the question to Legislative Legal
Services.
LISA WEISSLER, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
interjected that the fund was needs based, which meant that
there would be no need for a municipality to participate
until a death occurred. She added that the population would
be taken into account at the time of the person's death.
1:56:46 PM
Co-Chair Seaton felt that the language of the amendment was
vague, and hoped that it could be further clarified for the
record.
Ms. Wilkerson agreed that the language should be clarified.
She furthered that the clarification should come in the
form of policy from the committee.
1:59:02 PM
Vice-Chair Gara understood that the intention of the
amendment was to use the population numbers from the time
of the employee's death.
Vice-Chair Gara MOVED Conceptual Amendment 1 to Amendment
3:
Insert the words "at the time of the employees death"
on Page 1, Line 21, following the word "more" and on
Page 2, Line 4, preceding the work "according".
There being NO OBJECTION, Conceptual Amendment 1 to
Amendment 3 was ADOPTED.
Representative Pruitt understood it was still mandated that
municipalities participate.
Ms. Weissler replied in the affirmative.
Representative Pruitt queried the need for the amendment.
Ms. Weissler responded the language clarified the section
pertaining to the municipal mandate. She said that further
explanation could be provided by Legislative Legal
Services.
2:01:52 PM
DANIEL WAYNE, ATTORNEY, LEGISLATIVE LEGAL SERVICES, ALASKA
STATE LEGISLATURE (via teleconference), introduced himself.
Representative Pruitt repeated his question.
Mr. Wayne relayed the amendment was intended to clarify how
much municipalities were required to pay, and how much the
commissioner should pay from the fund.
Representative Pruitt noted the new section AS 39.60.050,
highlighted municipal contribution and stated that the
premiums should be paid by municipalities.
Mr. Wayne reiterated that the purpose of the amendment was
to make the statute more clear.
Vice-Chair Gara WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 3 was ADOPTED as amended.
2:04:14 PM
Co-Chair Seaton MOVED to ADOPT Amendment 4, 30-LS0258\O.12
(Wayne, 2/3/17) (copy on file):
Page 3, line 13:
Delete "reaches 65 years of age"
Insert "is eligible for Medicare"
Vice-Chair Gara OBJECTED for discussion.
Co-Chair Foster explained the amendment clarified that a
surviving spouse would become ineligible to receive major
medical insurance coverage upon reaching Medicare eligible
age, rather than the set age of 65 years old.
Representative Wilson thought that the amendment was
unnecessary. She argued that Medicare was considered "major
medical".
2:06:05 PM
Representative Wilson MOVED conceptual Amendment 1 to
Amendment 4.
Delete all language on Line 12 of page 3.
Vice-Chair Gara OBJECTED. He stated that a definition of
major medical was necessary in order to adopt the
conceptual amendment. He asserted that the amendment made
clear that the benefit ended once a person was eligible for
Medicare.
Representative Wilson thought that the committee should
have a definition of "major medical" on hand if they were
going to craft a bill based on the words. She wondered
whether the definition should be written into the bill
before it left committee.
Vice-Chair Gara asserted that Amendment 4 did not need to
be amended. He said that it would be important to track
when a person began receiving Medicare, so that the benefit
did not continue. He offered to read a definition of "major
medical" into the record.
2:09:26 PM
Representative Wilson maintained her objection to the
amendment unless conceptually amended.
Vice-Chair Gara shared that once Medicare began paying for
a person, the state no longer needed to provide coverage.
Representative Wilson WITHDREW the conceptual amendment to
number 4.
Co-Chair Foster noted that a technical amendment would be
needed to address the wrong page number attribution in
Amendment 4.
Vice-Chair Gara moved conceptual amendment 2 to Amendment
4.
Remove on Page 1, line 1 "Page 3, line 13", and insert
"Page 3, line 12".
There being NO OBJECTION, conceptual Amendment 2 to
Amendment 4 was ADOPTED.
Vice-Chair Gara WITHDREW his OBJECTION to Amendment 4.
There being NO further OBJECTION, Amendment 4 was ADOPTED
as amended.
2:13:38 PM
Co-Chair Seaton MOVED to ADOPT Amendment 5, 30-LS0258\O.8
(Wayne, 2/3/17) (copy on file):
Page 1, line 13, following "firefighter.":
Insert "The department shall create in the
fund an account for state employees and an account for
employees of small municipalities. 11
Page 2, lines 3 - 5:
Delete "The department shall create two
separate accounts in the fund, one account for state
employees and a separate account for employees of a
small municipality."
Vice-Chair Gara OBJECTED for discussion.
Co-Chair Foster explained that the amendment would move the
fund setup to the beginning of the bill, for clarity.
Representative Pruitt requested clarification concerning
the reason for moving the language.
Mr. Wayne explained that the intention of the amendment was
to move the concept from one place in the bill to another.
Representative Pruitt asked why the language needed to be
moved.
Mr. Wayne responded that he could not speak as to why the
move should be made. He assumed that the move was a matter
of writing style.
2:16:07 PM
Vice-Chair Gara stated the two sentences used different
words but appeared to say the same thing. He asked whether
the amendment had any impact on the meaning of, or coverage
in, the bill.
Mr. Wayne replied that he did not believe so. He felt that
the meaning of the language was the same.
Vice-Chair Gara asked whether the amendment made the
language of the bill "cleaner".
Mr. Wayne replied that Legislative Legal Services tried to
make things as clear as possible to the common
understanding in order to avoid ambiguity.
Representative Guttenberg expressed appreciation for the
amendment.
2:18:20 PM
Vice-Chair Gara WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 5 was ADOPTED.
Co-Chair Seaton MOVED to ADOPT Amendment 6, 30-LS0258\O.13
(Wayne, 2/3/17) (copy on file):
Page 4, lines 8 - 9:
Delete all material and insert:
"(5) "firefighter" means a person who is
(A) employed year round full
time buy the state or a municipality in a permanent
position and whose primary duty is to perform
fire response services; and
(B) eligible to receive major
medical insurance benefits as an employee of the state
or a municipality;"
Vice-Chair Gara OBJECTED for discussion.
Ms. Wilkerson explained that the words "year round" had
been added because the previous description implied that
the person would be a full-time, permanent position. She
understood that there were permanent, full-time firefighter
positions that were not year round. She said that in order
to describe the employee eligible for the benefits, it was
necessary to explain that the employee needed to be
employed year round. She shared that there could be a
negative tax consequence if the benefit was applied, end
extended 12 months of health benefits, when the employee
was actually receiving only 3 or 4 months of benefits.
2:20:50 PM
Representative Wilson asked how many seasonal employees
received full medical benefits.
Ms. Wilkerson replied that she did not know. She deferred
the question to the Division of Retirement and Benefits.
Ms. Wilkerson explained that as the bill was currently
written, providing premiums to pay for health care benefits
for the survivors of police and firemen, was an exception
to certain Internal Revenue Service (IRS) that concern
paying taxes on additional benefits. The IRS exception was
made because the IRS code had, through revenue rulings,
chosen to view the survivors as physically replacing the
employee. In order to make the benefit as close to what the
employee was receiving as possible, it was necessary to
identify the employee to which the benefit was being
originally applied.
Representative Wilson understood that the provision only
applied to year round employees and their dependents.
Ms. Wilkerson asked for clarification of the question.
Representative Wilson restated her question.
2:24:18 PM
Ms. Wilkerson responded that the level of care referred to
the premium, standard, or economy plan. She said that if
the committee wished to arrange the duration of the period
of insurance, then it should be separately addressed;
presently, the bill considered a 12 month per year medical
benefit.
Representative Guttenberg asked whether wildland forest
firefighters, who worked 8 to 10 months per year, would be
eligible for the benefits under the amendment's definition
of firefighter.
Ms. Wilkerson answered that the intention of the amendment
was to make it clear the premium was paid to the survivor
if an employee had been receiving the payment. The
amendment clarified it would apply to a year-round
employee. It was possible to make a change, but it would
require adjustment and restructuring of the bill by the
committee.
Representative Guttenberg expressed concern for benefits
for firefighters who did not work year round, but did work
full-time.
2:27:07 PM
Vice-Chair Gara offered a hypothetical involving a
firefighter or police officer who was a full-time employee
of the state or a municipality, who died in the line of
service. He wondered what the harm, or potential IRS
consequences, there would be in covering those employee's
survivors.
Ms. Wilkerson replied that it was difficult to speak to
hypotheticals. She said that the department was concerned
that putting the survivor in the "shoes of the employee"
benefit-wise could have unintended consequences.
Vice-Chair Gara understood that the department was
concerned with covering spouses of deceased employees who
had not been year round employees.
Ms. Wilkerson said that the concept was to take an employee
that was receiving benefits, and provide the benefits as if
the employee continued to live, to the survivor. She stated
that if the employee was only employed four months out of
the year, the survivor would not have expected the benefits
for the remainder of the year through that employer.
2:31:17 PM
Co-Chair Foster offered options related to the amendment.
He moved the amendment to the bottom of the list.
Co-Chair Seaton WITHDREW his MOTION to adopt Amendment 6.
The amendment would was moved to the bottom of the list.
2:32:07 PM
Co-Chair Seaton MOVED to ADOPT Amendment 7, 30-LS0258\O.14
(Wayne, 2/3/17) (copy on file):
Page 4, line 12:
Delete all material and insert:
"(7) "police officer" means a person who
(A) is employed year round, full time
by the state or a municipality in a permanent
position;
(B) has the authority and whose
primary duty is to arrest and issue citations; detain
a person taken into custody until that person can
be arraigned before a judge or magistrate; conduct
investigations of violations of and enforce criminal
laws, regulations, and traffic laws; search with or
without a warrant persons, dwellings, and other
forms of property for evidence of a crime; and take
other action consistent with the exercise of these
powers when necessary to maintain the public peace;
and
(C) is eligible to receive major
medical insurance benefits as an employee of the state
or a municipality;"
Vice-Chair Gara OBJECTED for discussion.
Co-Chair Foster explained that the amendment would redefine
"police officer" in the bill.
Representative Pruitt requested that the amendment be
rolled to the bottom of the list, as it was similar to
Amendment 6.
Co-Chair Seaton WITHDREW his Motion to Adopt Amendment 7.
The amendment would was moved to the bottom of the list.
Co-Chair Seaton MOVED to ADOPT Amendment 8, 30-LS0258\O.4
(Wayne, 2/3/17) (copy on file):
Page 3, line 10:
Delete "(l)"
Page 3, line 11:
Delete "; or"
Insert "or 10 years after the date of the
employee's death."
Page 3, line 12:
Delete all material.
Representative Wilson OBJECTED for discussion. She said
that the amendment would put a limit of liability of the
state and municipalities to pay for coverage.
Representative Wilson WITHDREW her OBJECTION.
Vice-Chair Gara OBJECTED. He stated the purpose of the bill
was to provide some benefit to surviving spouses and
children when an employee died in the line of duty. He
believed a 10-year period was arbitrary.
2:35:56 PM
Representative Thompson clarified the amendment did not
would not end coverage for children until 26 years of age.
Representative Wilson replied in the affirmative.
Representative Pruitt spoke in support of the amendment. He
felt that the goal was to help families transition after
the death of a family member. He spoke of similar efforts
by the military, and noted that the transition period for
those families had an eventual end. He thought that the
fiduciary duty of the state should be balanced with the
transition time by providing a specific end time.
Representative Guttenberg stated that in his experience the
time after death had not been a transition, it had been a
permanent situation. He opposed the amendment.
2:38:52 PM
Representative Kawasaki appreciated the value of an
adequate transition time, but he did not want to be
responsible for defining the amount of time a surviving
spouse needed. He suspected that the fund would have to be
applied for annually, which would already be burdensome for
families.
Vice-Chair Gara expressed a personal connection to the
issue; his father had been killed when he was 6 years old,
which had left his mother without health insurance. He
strongly opposed the amendment.
Vice-Chair Gara MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt, Thompson, Tilton, Wilson
OPPOSED: Grenn, Guttenberg, Kawasaki, Ortiz, Gara, Seaton,
Foster
The MOTION to adopt Amendment 8 FAILED (4/7).
2:42:18 PM
Representative Guttenberg chose to not offer Amendment 9,
30-LS0258\O.l (Wayne, 2/2/17) (copy on file).
Co-Chair Seaton MOVED to ADOPT Amendment 10.
2:43:41 PM
AT EASE
2:44:21 PM
RECONVENED
Co-Chair Seaton WITHDREW his motion to ADOPT Amendment 10.
Representative Kawasaki MOVED to ADOPT Amendment 10, 30-
LS0258\O.23 (Wayne, 2/7/17) (copy on file):
Page 1, line 2:
Delete "police"
Insert "peace" 4
Page 1, line 6:
Delete "Police"
Insert "Peace"
Page 1, line 7:
Delete "Police"
Insert "Peace" 12
Page 1, line 9:
Delete "police"
Insert "peace" 16
Page 1, line 10:
Delete "Police"
Insert "Peace" 20
Page 1, line 11:
Delete "police"
Insert "peace"
Page 1, line 13:
Delete "police"
Insert "peace"
Page 2, line 1:
Delete "police"
Insert "peace"
Page 2, line 22:
Delete "police"
Insert "peace"
Page 2, line 24:
Delete "police"
Insert "peace" 16
Page 2, line 28:
Delete "police"
Insert "peace"
Page 4, lines 8 - 9:
Delete "of the state or a municipality employed
to perform fire suppression services;"
Insert "occupying a position as a firefighter or
fire chief;"
Page 4, line 10:
Delete "police"
Insert "peace"
Page 4, line 12:
Delete all material and insert:
"(7) "peace officer" means an employee occupying
a position as a peace officer, chief of police,
regional public safety officer, correctional
officer, correctional superintendent, or
probation officer;"
Page 4, line 18:
Delete "police"
Insert "peace" 7
Page 4, line 21:
Delete "police"
Insert "peace"
Representative Wilson OBJECTED for discussion.
Representative Kawasaki explained that the amendment would
incorporate the all-encompassing "peace officer" definition
for police and firefighters into the bill. He said that the
term was defined in statute and that it referred to an
employee who was a peace officer, a chief of police, a
regional public safety officer, a correctional officer, a
correctional superintendent, or a probation officer. He
believed that the amendment would correct unequal treatment
among officers. He spoke specifically to the treatment of
correctional officers.
2:46:59 PM
Representative Thompson noted the fiscal notes did not
include correctional or probation officers. He queried
whether the amendment would have impact on the fiscal note.
Representative Kawasaki referred to a list of work-related
deaths of Department of Corrections (DOC) officers, in
1988, 1990, 1991, 2002, and 2013, none of the five DOC
officers would qualify for benefits under the definition
currently contained in the bill. He shared that their
injuries had not been due to something sustained at work.
He asserted that no probation officers had died on the job.
Co-Chair Seaton spoke to the broadness of the term "peace
officer", as opposed to "police officer".
Representative Kawasaki answered that peace officers was
defined in the legislation and specifically addressed
chiefs of police, regional public safety officers,
correctional officers, correctional superintendents, or
probation officers. He relayed that the only change from
version O and the amendment was the inclusion of chiefs of
police, correctional superintendents, or probation
officers.
2:50:12 PM
Representative Guttenberg asked for a definition of a
regional police.
Ms. Wilkerson answered that, while the term existed in
statute, she understood that the job classification no
longer existed and that the duties had been subsumed by
troopers.
Representative Wilson assumed probation officers included
juvenile probation officers. She asked whether parole
officers were included in the definition.
Representative Kawasaki answered that the definition
included juvenile probation officers, but not parole
officers.
Representative Wilson imagined the danger would be similar
in both jobs. She wondered about the distinction of safety
between parole and probation officers.
Representative Kawasaki replied that did not know whether
one job was safer than the other.
Representative Wilson WITHDREW her OBJECTION.
There being NO further OBJECTION, Amendment 10 was ADOPTED.
2:52:17 PM
Representative Wilson MOVED to ADOPT Amendment 11, 30-
LS0258\O.3 (Wayne, 2/3/17) (copy on file):
Page 1, line 8:
Delete "the"
Insert "participating"
Page 3, line 23, following "section.":
Insert "The commissioner may not pay a premium
for an eligible dependent of a municipal employee
from the fund unless the municipal employer has
paid the corresponding premium required under AS
39.60.050."
Page 3, line 25, following "municipality":
Insert "that participates in the fund"
Vice-Chair Gara OBJECTED for discussion.
Representative Wilson explained the amendment would allow
municipalities to opt in to the payment of employee
premiums.
Vice-Chair Gara stated that under the amendment, a person
could be killed in the line of duty and the spouse or
children would have no coverage. He stated the purpose of
the bill was to provide coverage. He objected to the
amendment.
2:55:10 PM
Representative Wilson appreciated the comments. She
rebutted that the current bill did not cover service area
firefighters. She argued that the option should be given to
municipalities to determine how they wanted to insure their
employees.
Vice-Chair Gara MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt, Thompson, Tilton, Wilson
OPPOSED: Guttenberg, Kawasaki, Ortiz, Gara, Grenn, Foster,
Seaton
The MOTION to adopt Amendment 11 FAILED (4/7).
2:57:17 PM
Representative Wilson MOVED to ADOPT Amendment 12, 30-
LS0258\O.2 (Wayne, 2/3/17) (copy on file). [Note: due to
amendment length it has not been included in the minutes.
See copy on file.]
Vice-Chair Gara OBJECTED.
Representative Wilson explained the amendment. She
emphasized she appreciated the hard work done by state
employees, but wondered whether the medical expenses should
be paid for out of the general fund.
Co-Chair Foster referred to a handout including the
definition of "major medical" (copy on file).
Co-Chair Seaton asked if expanding the bill to various
statutes would bleed into the issue of Public Employees'
Retirement System (PERS).
Ms. Wilkerson replied in the affirmative. She said that the
department was concerned about the impact because premium
payments would be extended to all state employees, via
eligibility under the PERS Occupational Disability Death
Benefit. She relayed that the amendment would apply to PERS
members who qualified for the death benefit, and not only
police officers and fire fighters. She added that Alaska
State Troopers were not covered under current statute.
3:03:21 PM
Co-Chair Seaton asked if an actuarial fiscal note was
required when passing legislation related to PERS
employees.
Ms. Wilkerson replied in the affirmative. She detailed that
under A.S. 24.08.036, before a bill having an effect on a
retirement system was reported to the rules committee it
must have an actuarial analysis.
Co-Chair Seaton understood that if the amendment were to be
adopted, the bill could not be moved to the House Rules
Committee without a fiscal note that provided an actuarial
analysis. He wondered what the numbers of the analysis
would look like after adding the benefit premiums.
Representative Wilson disagreed that the amendment would
lead to the inclusion of PERS and TRS in the bill. She
asked to hear from Legislative Legal Services.
3:04:58 PM
Mr. Wayne answered that the amendment did not have an
impact on PERS and TRS. He said that the amendment would
cross reference sections found in PERS, under which the
survivor of an employee who dies in the line of duty can
qualify for a survivor pension benefit, not a medical
benefit. He stressed that the amendment would not make
someone eligible for coverage under PERS, it would make
them eligible for employee coverage under the policy of
group insurance under the subsection A.S.39.30.091, or 095.
He understood that A.S. 39.30.090, 091, and 095 were the
three section under which all state employee coverage was
authorized and obtained, including the coverage under self-
insurance plans obtained by the union representing Alaska
State Troopers. He hypothesized that if a trooper were to
die on the job, and the bill including the amendment were
law, the insurance that the trooper had been receiving as
an employee would continue as long as the death had been in
the line of duty.
3:09:36 PM
Representative Thompson understood that all state employees
were included in the amendment.
Representative Wilson replied in the affirmative. She added
that teachers would not be protected because they are not
employed by the state, but rather by municipalities.
Vice-Chair Gara MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Pruitt, Tilton, Wilson,
OPPOSED: Kawasaki, Ortiz, Thompson, Gara, Grenn,
Guttenberg, Seaton, Foster
The MOTION to adopt Amendment 12 FAILED (3/8).
3:12:03 PM
Representative Guttenberg MOVED to ADOPT Amendment 13, 30-
LS0258\O.20 (Wayne, 2/6/17) (copy on file):
Page 2, lines 2 - 3:
Delete "designated for state employees or
employees of a small municipality"
Insert "to the fund based on an amount determined
under AS 39.60.020"
Page 2, lines 12 - 13:
Delete "determine the amount of money
sufficient to pay premiums under 7 AS
39.60.030"
Insert "set an eligible participant contribution
rate based on the payroll for persons who are
eligible under AS 39.60.040, the anticipated
amount of the premiums payable under 10 AS
39.60.030,"
Representative Wilson OBJECTED for discussion.
Representative Guttenberg relayed that the amendment would
create a larger trust; premiums would not be paid, people
would pay an assessment on the cost of keeping the fund
active. He asserted that the risk would be spread across
all of the eligible employees of the state and
municipalities.
Representative Ortiz queried how the amendment would impact
the burden to municipalities.
Representative Guttenberg believed the amendment would
significantly lower the burden to municipalities.
Representative Thompson surmised that the amendment would
increase the cost to municipalities. He assumed that the
fund could be raided by future legislatures. He stated the
legislature could not dedicate funds, and expressed concern
that the fund would be used as a slush fund in the future.
He queried whether there was a cap on the fund.
3:15:38 PM
Representative Guttenberg replied that the commissioner, or
fund manager, would determine the liability for the fund,
and set an eligibility contribution rate. He said that
there was no intent to build up a fund beyond what was
needed. He relayed that the liability would be spread
across the entire spectrum of employees. He reiterated that
if there were no deaths in a certain timeframe then no
contribution would be necessary, the rate would only go up
to cover deaths, no premiums would be paid.
3:17:30 PM
Representative Pruitt understood that every state employee
would pay approximately $2 per year to the fund, and was
reflected as $56,000 on the current fiscal note.
Representative Guttenberg replied in the affirmative. He
explained that the calculation would be based on the
liability of the fund divided by all of the eligible
employees.
Representative Pruitt understood that the amendment would
remove the pressure from the general fund and place it on
potential beneficiaries.
Representative Guttenberg explained that the state and the
municipalities would pay a percentage based upon the number
of participating beneficiaries. The $56,000 would be
divided by the number of eligible employees, and would be
assessed by the state and the municipalities.
Representative Pruitt surmised that the burden to pay the
$2.00, he denounced that the amendment offered any sort of
change.
Representative Guttenberg shared that the change was that
premiums were not going to be paid, the potential liability
would be spread across the entire state of eligible
employees.
Representative Pruitt understood that the amendment would
mandate municipalities to pay to facilitate the program.
3:22:16 PM
Representative Guttenberg answered in the affirmative. He
reiterated that the amendment would spread the risk across
the state, and should decrease everyone's liability
significantly.
Co-Chair Seaton pointed to line 8 of the amendment:
"set an eligible participant contribution rate based
on the payroll for persons who are eligible under AS
39.060.040,
Co-Chair Seaton thought that the language referred to the
eligibility of a spouse that was not on payroll.
Representative Guttenberg deferred to the Legislative
Finance Division.
DAVID TEAL, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that rather than unduly burden smaller
communities with liability, the amendment would require a
small contribution to the fund based on payroll. He said
that the same amount of money would be collected, as would
be collected with premiums, but would be collected by
everyone regardless of employer. He said that the advantage
of spreading the risk was a safer way of funding the
program. He offered the example of Alaska State Troopers,
current law the states that the state "shall" pay health
insurance premiums for surviving dependents. He pointed out
that the word "shall" made the payments subject to
appropriation by future legislatures, meaning that the
appropriation to fill the fund would need to be requested
each year. He offered that the alternative would be to use
the fund like the retirement, or working reserve fund,
where money was appropriated to the Department of Public
Safety, alleviating the worry for future funding. He
furthered that contributing the percentage to payroll would
result in the $56,000 that was needed; if someone else were
to be killed in the line of duty there would be an
automatic salary adjustment, which would be reflected in
the budget, and would cover the increase. He relayed that
the amendment would help to move away from an annual
appropriation and would spread the financial risk. He
thought that it could indirectly impact eligibility by
making it easy to extend the eligibility to others. He said
that if an employer chose to contribute, their employees
would be covered, regardless of their job title.
Co-Chair Foster noted several committee members needed to
leave for a subcommittee meeting. He concluded the meeting
for the day.
[Note: no action was taken on Amendment 13]
HB 23 was HEARD and HELD in committee for further
consideration.
3:28:18 PM
Co-Chair Foster relayed the committee would continue to
hear the bill the following day.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB23 ver O - Legal and Policy Concerns with PERS 020317.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |
| HB 23 Answers to questions from the committee.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |
| HB 23 Support Letters PKT 2 2.2.17.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |
| HB 23 Letters of Support PKT 3.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |
| HB 23 Letters of Support PKT 4 2.6.17.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |
| HB 23 Amendments 2.7.17.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |
| HB 23 Supporting Doc. AS definition of major medical.pdf |
HFIN 2/7/2017 1:30:00 PM |
HB 23 |