Legislature(2017 - 2018)SENATE FINANCE 532
04/05/2017 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB48 || HB23 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 48 | TELECONFERENCED | |
| += | HB 23 | TELECONFERENCED | |
SENATE BILL NO. 48
"An Act creating a fund in the Department of Public
Safety; providing for payment of certain medical
insurance premiums for surviving dependents of certain
police officers or firefighters who die in the line of
duty; and providing for an effective date."
CS FOR HOUSE BILL NO. 23(FIN) am
"An Act creating a fund in the Department of Public
Safety; providing for payment of certain medical
insurance premiums for surviving dependents of certain
peace officers or firefighters who die in the line of
duty; relating to contributions from permanent fund
dividends to the peace officer and firefighter
survivors' fund; and providing for an effective date."
2:07:11 PM
Co-Chair MacKinnon informed that the committee would we
continuing a conversation from earlier in the day regarding
SB 48 and HB 23. She wanted to review what she considered
the difference between the two bills. She highlighted that
in SB 48 there was a municipal "opt in", which meant that
municipalities had the option to participate in the program
and the costs would be borne by the municipalities. She
relayed that HB 23 would require municipalities to
participate; large municipalities with a population of over
10,000 would pay the entire cost, while small
municipalities would have 50 percent of the cost covered by
the state. She noted that in SB 48, "major medical" was
used and did not include dental or vision coverage; HB 23
required that medical insurance continue to be provided at
the same level as the employee's benefits at the time of
death. She related that HB 23 could allow for widowed
spouses to opt in or out of the benefit plan. She said that
SB 48 excluded temporary and seasonal employees and the
benefit would only apply to surviving dependents of
permanent, full-time employees for which the employee was
paid for 12 months of the year. HB 23 included temporary
and seasonal employees; surviving dependents of temporary
or seasonal employees would be eligible for benefits. She
said that under SB 48 surviving spouses would become
ineligible for benefits after receiving the benefit for 10
years. She countered that in HB 23, spousal benefit could
be received until the age of eligibility was reached for
Medicare.
2:10:31 PM
Co-Chair MacKinnon continued saying that in SB 48, under
continued eligibility, the bill required the commissioner
to annually determine the eligibility of the benefits. In
HB 23 there was continued eligibility that did not require
a determination by the commissioner after the initial
determination.
2:10:56 PM
Co-Chair MacKinnon explained that there was no provision
for the Pick.Click.Give program in SB 48; however, the
provision did exist in HB 23. She stated that in SB 48 the
commissioner would be required to determine the amount of
money needed to pay the benefit annually by December 15th.
HB 23 required the commissioner was required to determine
the amount of money needed to pay the benefit annually by
June 30th. She said that a surviving dependent would become
permanent ineligible upon becoming eligible for coverage by
other means in SB 48, she furthered that upon becoming
eligible for coverage by other means would not result in
ineligibility for coverage under HB 23. She concluded that
those were the primary differences that could be outlined
at this time.
2:13:22 PM
AT EASE
2:14:03 PM
RECONVENED
Co-Chair MacKinnon wondered whether people who were not
currently covered, but met eligibility requirements, be
able to opt in and out of the program.
JOAN WILKERSON, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, asked if Co-Chair MacKinnon's questions pertained to
the eligibility provisions under HB 23.
Co-Chair MacKinnon wondered how it would be possible to
know under HB 23 whether a person was ineligible. She
extended the question to either bill, saying that the
senate was trying to manage whether the opting in or out of
the program should be added to their version of the
legislation. She queried whether allowing for an option
would be easy to accommodate, and if so, would there be a
cost associated with allowing an option.
2:16:45 PM
Ms. Wilkerson stated that the issue arose and was addressed
in the House. Because of the way the language was written,
the interpretation was to allow survivors to opt in and out
over time. She said that an amendment could provide further
clarification if the committee so wished.
2:17:31 PM
Co-Chair MacKinnon asked how the department currently
handled eligibility if an individual was not required to
come back and re-qualify for eligibility.
Ms. Wilkerson replied that the premium payment was new to
the department. She elaborated that the concept was to
create regulation that would require the applicant to apply
for the benefit and to indicate whether they had insurance
at the time of applying. She said that the currently
obligation fell to the survivor to notify the department
when they became ineligible by having other major medical
insurance available to them.
2:18:43 PM
Senator Micciche hypothesized that under the house version,
the employed spouse of a deceased police officer would
immediately be ineligible for coverage because their
coverage would end once they were covered under employment.
Ms. Wilkerson stated that if the survivor had medical
coverage, the premium payment would not apply; the coverage
was intended for people that did not have insurance
coverage.
Senator Micciche asked how eligibility was covered under
Tier 1.
2:19:50 PM
KATHY LEA, CHIEF PENSION OFFICER, DIVISION OF RETIREMENT
AND BENEFITS, DEPARTMENT OF ADMINISTRATION, explained that
under Tier 1 a survivor that received medical insurance
would become eligible at the time of the participants death
whether they had coverage somewhere else. She added that
their retiree coverage that they received with their
survivor benefits would become secondary.
2:20:27 PM
Vice-Chair Bishop understood that under HB 23, once
survivors were approved for benefits, the approval was
ongoing in perpetuity.
Ms. Wilkerson thought that under HB 23, once a survivor was
known to be eligible for benefits, they would receive the
benefits.
Vice-Chair Bishop wondered whether those people would ever
become ineligible.
Ms. Wilkerson replied that the survivor would have to
notify the division of the alternative coverage.
Vice-Chair Bishop asked whether regulation entreated the
disclosure. He asserted that he did not want to deny
benefits to anyone but that it was important to craft
clearly interpretable legislation.
2:22:27 PM
Co-Chair MacKinnon recommended that the committee annually
review the eligibility process. She asked whether the
benefit for survivors would be retained in retirement.
Ms. Lea answered in the affirmative, if the individual
would continue to receive retiree health insurance, which
would be secondary.
Co-Chair MacKinnon spoke to the retroactivity of coverage.
She stated that an effective date of July 1, 2017 had been
considered for both bills. She asked what would be
defendable, so that the state could be free of litigation
on the matter if a look back year were chosen arbitrarily.
She wondered how the state could be protected while also
meeting the needs of people who had been affected by the
30-year gap in service.
Ms. Wilkerson stated that the way the bill was written, the
triggering mechanism was not the date of death, and was not
retroactive; but was triggered by the application date.
Present survivors who had already lost family members could
apply and receive benefits. She reminded the committee that
to be eligible terms and condition had to be meet, as well
as prove that there was no other insurance available. She
referred to the number of police officers and fire fighters
that had died; most of the people impacted were already
covered by other forms of insurance.
2:26:37 PM
Co-Chair MacKinnon stated that there had been an assertion
that people who had lost loved ones within the past ten
years would be able to apple for benefits. She wondered how
the qualifications for application for the benefit would be
defined in regulation.
Ms. Wilkerson stated that an applicant could apply but
would not receive a benefit until July 1, 2017. She relayed
that the committee could put a date in the bill for further
clarification.
2:28:23 PM
Senator Micciche thought that the goal should be ten years
from the date of the loss of the serving spouse. He tried
to restate Co-Chair MacKinnon's question.
Co-Chair MacKinnon stated that Senator Micciche did not
accurately restate her question.
2:29:13 PM
AT EASE
2:34:57 PM
RECONVENED
Co-Chair MacKinnon restated her question concerning
coverage and applications.
Ms. Wilkerson explained that the state had been looking at
the actual number of state related employee deaths, which
were few, and had determined that the cases involved a
small number of people who would not already be covered by
PERS retirement health benefits. She said that the
committee should determine the number of years back a
person could be eligible.
Co-Chair MacKinnon understood that the state did not have a
figure for the number of lives lost under municipalities.
She thought mandating the municipalities provide coverage
could result in an unknown cost to the state.
Ms. Wilkerson stated that information about employers that
were not within the PERS system was not available for the
state to provide to the committee.
2:36:46 PM
Vice-Chair Bishop noted that 7 people listed were employees
of small municipalities.
Co-Chair MacKinnon reiterated that there was a policy to be
made. She asked whether off-duty officers should be covered
and, if so, what parameters should be set in statute or
regulation.
2:37:22 PM
Senator Dunleavy opined that if a first responder was
killed in the line of duty, they should be covered.
2:37:49 PM
Co-Chair MacKinnon asked whether families should be given
the discretion to choose their current plan.
2:38:42 PM
Senator Dunleavy felt that if there were eligibility
guidelines that people fell under then they should be
covered.
2:39:16 PM
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, stated that the
issue was about the case of a survivor being remarried and
their spouse had a plan; many plans allowed for an optional
family coverage, versus a primary person. She said that the
new spouse would be covered but that the person currently
covered under the surviving spouse would be covered by
their employee plan and would have to pay an additional
premium to cover the surviving spouse and dependent
children. She said that the spouse was not automatically
covered and could opt in and pay a higher premium. She
stated that because of the word "eligibility" it had been
unclear whether the surviving spouse was eligible for the
plan even though an additional premium would have to be
paid by the new spouse, or could the person chose to say
that they did not want to pay the additional cost for the
new plan and stay with the original surviving benefit. She
said that the statute was unclear, and that the committee
should clarify the language.
2:41:10 PM
Ms. Wilkerson commented that if the point was to expand
upon what was in the current bill, which rendered a person
who became eligible for other medical insurance, ineligible
for survivor benefits, an amendment would be required.
Co-Chair MacKinnon asked whether the bill should allow the
policy in the bill to become secondary so as to not be a
disincentive for re-marriage or job promotion with
benefits.
2:42:12 PM
Senator Micciche relayed that both bills currently stated
that the person would become ineligible for premium
payments once the surviving spouse became eligible to
receive major medical insurance coverage by other means.
He thought that allowing for re-eligibility could solve the
problem. He believed that the goal was to provide a safety
net for survivors of first responders lost in the line of
duty.
2:43:30 PM
Senator von Imhof thought that the ten-year limit in SB 48
was a sensible amount of time for a spouse to opt in or opt
out of coverage.
2:44:04 PM
Senator Dunleavy discussed the concept of comparable
insurance. He thought that offering incomparable insurance
could be a disincentive to accept employment.
Co-Chair MacKinnon relayed that in her meeting with a
testifier from the morning meeting, there had been an
assertion that the testifiers family had made an active
choice to continue, beyond the 20 years, to seek the
benefit of the five more years of employment to secure
health benefits for the family. She said that the
individual had advocated that the benefit be viewed as a
retirement benefit versus an ongoing employee relationship.
She felt that this testifier was in favor of the option to
opt in or out but was not supportive of the 10-year
timeframe.
2:46:15 PM
Senator Micciche understood that every family had had their
premiums paid in the past but that beneficiaries now feared
that coverage would be lost at the end of the month. He
warned against spending too much time on exhaustive details
and stressed that the committee should focus on ensuring
that surviving families of first responders had an adequate
safety net for reasonable coverage. He lamented the myriad
of factors involved and suggested that families were only
seeking adequate coverage.
Co-Chair MacKinnon referred to the loss of a family member
and the subsequent difficulty with obtaining a death
certificate. She thought a 30-day application period for
benefits was insufficient. She suggested that if a death
certificate were required for survivors to apply for
benefits, the application period should be extended.
2:49:59 PM
Ms. Wilkerson stated that in writing the brand-new premium
payment program the department had worked to create a
matrix involving appropriate timeframes for application
hurdles. She noted that the senate version of the bill
would presume that the person was eligible, even during the
application process, so that payments could begin
immediately. She thought that the committee should consider
which bill version would allow for an extended application
period.
Co-Chair MacKinnon thought that the risk could be that
someone or an entire family that did not qualify, would
receive coverage for one month during the application
process. She proposed a minimum of 45 days to 2 months for
the procurement of a death certificate. She solicited
comments on the matter from the committee via email.
2:52:46 PM
Senator Micciche noted that SB 48 allowed for major medical
coverage, while HB 23 allowed for coverage at the current
level of the survivor. He asked for an explanation of the
difference in the two coverages.
Ms. Wilkerson referred to information that the department
had provided to the House Finance Committee in response to
the same inquiry. She discussed the difference between the
terms health insurance, medical insurance, and major
medical insurance. She stated that that statute that
defined health insurance was broad and included items that
were not intended under the legislation; for example, stop-
loss insurance, dismemberment, accidental death, and
disability were not included. She said that Alaska Statute
21.55.514 defined term "major medical insurance" as
including dental, or vision care if it was included within
a medical policy; the definition did not include stand-
alone dental and vision. She furthered that the term
"medical insurance" that the house had decided on, was not
defined in statute but was commonly used in the insurance
industry to encompass major medical and could include plans
that had dental and vision coverage.
2:55:18 PM
Senator Micciche asserted that he had not heard the
discussion pertaining to the differing types of coverage.
Co-Chair MacKinnon commented that all the members heard
things differently. She recalled a surviving spouse that
had testified in appreciation of the language for medical
insurance that provided the stand-alone policies. She noted
that there had been supporting testimony for both bill
versions.
2:56:37 PM
AT EASE
3:00:26 PM
RECONVENED
Senator Dunleavy was pondering the difference between the
two bill versions. He discussed the concept of continuation
of care. He thought that the problem could be solved by the
plan itself including continuation of care.
3:01:14 PM
Co-Chair MacKinnon queried disability benefits for a person
injured on the job.
Ms. Lea responded that there were both occupational and
non-occupational in the defined benefit tiers. She said
that a disability that was directly tied to a person's work
would make them eligible for an occupational disability
benefit; 40 percent of their salary would be awarded for
the month in which they were disabled and would continue to
receive the benefit until they reached normal retirement
age or service eligibility. She furthered that they would
continue to earn membership service while receiving
disability benefits and would receive medical benefits, as
well.
Senator von Imhof asked whether Ms. Ms. Lea had been
referring to the benefits under Tier 1.
Ms. Lea stated that those benefits applied to Tier 1, Tier
2, and Tier 3 employees.
3:02:45 PM
Vice-Chair Bishop asked about Tier 4.
Ms. Lea stipulated that under Tier 4, an individual would
receive the same benefit and would continue to earn service
while receiving disability benefits; additionally, the
employer would pay both the employee contribution and the
employer contribution that would have been paid if the
member was still working, into their investment account.
She related that once normal retirement aged was reached,
the disability benefits would end, and the employee would
have access to the investment account.
3:04:10 PM
Co-Chair MacKinnon referred to an earlier comment about
Tier 1 language that used to provide for the benefits under
discussion. She wondered what language had changed with the
elimination of Tier 1, that precluded surviving spouses
from receiving benefits.
Ms. Lea stated that the surviving spouse was eligible for
benefits in all tiers, whether they paid the premium was
what changed under Tier 2. She stated that under Tier 2,
the spouse had to pay the premium if they were under age
60. She said that language had been added to Section C of
the statute that persons under age 60, that were receiving
benefits, would have to pay the full monthly premium. She
noted that Tier 3 had the additional requirement of
requiring 10 years of membership service to be eligible.
3:05:48 PM
Vice-Chair Bishop asked whether the conversation could be
of the same nature if Tier 1 was currently in effect.
Ms. Lea replied in the negative. She confirmed that the
changes that happened with Tier 2 and 3 were cost
containment measures for the plan.
Vice-Chair Bishop asserted that there must be a template
for survivor benefits under Tier 1.
Ms. Lea said that that was correct. She said that the
requirement for a survivor to pay for premiums could be
removed. She warned that that could be costly and would
require an actuarial study.
Co-Chair MacKinnon thought the conversation in the previous
legislative cycle had determined that opening and changing
Tier 2, 3, or 4 would reopen the entire benefits
conversation, which the legislature was not interested in
doing.
3:07:21 PM
Co-Chair MacKinnon asked whether there were additional
costs to the surviving parent for children covered under
the age of 26 years old.
Ms. Lea replied that she would provide an answer to the
question at a later date.
Co-Chair MacKinnon wanted to know why the Department of
Administration (DOA) would not be administering the
program.
KELLY HOWELL, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF PUBLIC SAFETY, said that the Department of Public Safety
(DPS) was currently paying the medical insurance premiums
for 3 of the surviving families that would be eligible
under the legislation. She stated that DPS already had
established policies and protocols for similar situations;
a coordinator was assigned to the family of the deceased
employee and that person was responsible to assist the
family in identifying and accessing all the assistance and
resources available. She said that accessing the premium
payment program would be added to the list of services they
provide. She added that the department was uniquely
situated because it was a tightly knit, family-oriented
organization with a unique understanding of the situations
in which the families found themselves.
3:10:37 PM
Co-Chair MacKinnon asked whether the department was
prepared to take on the obligations of the legislation in
her department.
Ms. Howell stated that the department hoped that the
program would not be overly-burdensome to administer, at
this point the department was willing to accept the
additional responsibilities with assisting the families
under the program.
3:11:32 PM
Co-Chair MacKinnon asked whether Ms. Wilkerson had a
comment on the eventuality of DPS administering the
program.
Ms. Wilkerson replied that she echoed previous testimony on
the matter and added that DPS was the logical department to
administer the program because DOA would need to add
additional PCNs to administer the program.
3:12:38 PM
Co-Chair MacKinnon discussed the subject of coverage of
unborn children of deceased officers. She requested
feedback from the committee on whether the issue should be
written into the committee substitute.
Co-Chair MacKinnon mentioned a document from Legislative
Research Services entitled "Medical Benefits for the
Surviving Dependents of Law Enforcement Officers and
Firefighters Killed in the Line of Duty" (copy on file).
3:14:04 PM
Senator Dunleavy commented on the high rate of crime in the
state and the risk of being a first responder.
Co-Chair MacKinnon discussed housekeeping.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 23 Legislative Research Paper.pdf |
SFIN 4/5/2017 1:30:00 PM |
HB 23 |