03/15/2011 02:00 PM Senate LABOR & COMMERCE

        SB  81-PUBLIC RETIREE MED. BENEFITS: DEPENDENTS                                                                     
                                                                                                                                
CHAIR EGAN announced SB 81 to be up for consideration.                                                                          
                                                                                                                                
SENATOR  GIESSEL  recalled  previous testimony  that  this  issue                                                               
didn't coincide with the active  employee coverage for dependents                                                               
and asked if  there are there other areas of  discord between the                                                               
benefits of an active employee and a retired employee.                                                                          
                                                                                                                                
TOM OBERMEYER,  staff to Senator  Davis, said he wasn't  aware of                                                               
any, but the department might be.                                                                                               
                                                                                                                                
2:04:07 PM                                                                                                                    
JIM  PUCKETT,   Acting  Director,  Division  of   Retirement  and                                                               
Benefits,  Department of  Administration  (DOA),  said there  are                                                               
some differences  between the active  plan and the  retiree plan.                                                               
The  differences  are in  deductible,  co-pay,  and some  of  the                                                               
various  coverages. The  retiree plan  is an  older plan  and has                                                               
been slower  to have  changes implemented in  it, but  the active                                                               
plan has been better able to keep up with technological changes.                                                                
                                                                                                                                
SENATOR GIESSEL asked if they are  likely to see other changes to                                                               
retiree benefits and  if they wait for people  to complain before                                                               
making changes.                                                                                                                 
                                                                                                                                
MR. PUCKETT replied one way to  change the benefits is to bring a                                                               
bill forward like now.                                                                                                          
                                                                                                                                
SENATOR PASKVAN  said his inference  in the way he  presented the                                                               
retirement plan is  that it is better than the  current plan. The                                                               
question is about the materiality of the differences.                                                                           
                                                                                                                                
MR. PUCKETT replied  it depends on perspective.  The retiree plan                                                               
has lower deductibles and co-pays  and lower cost to the members.                                                               
It  doesn't have  as many  preventive services  as in  the active                                                               
plan.  It's an  older plan  that because  of some  previous court                                                               
cases makes  it harder to change  due to Article XII,  Section 7,                                                               
of  the  State  Constitution.  Both   plans  have  strengths  and                                                               
weaknesses.                                                                                                                     
                                                                                                                                
SENATOR PASKVAN asked if enacting SB  81 avoids a lawsuit that is                                                               
highly likely if  dependents up to age 26 are  not covered in the                                                               
retiree plan.                                                                                                                   
                                                                                                                                
MR. PUCKETT answered  that Legislative Legal has  opined that the                                                               
state should provide it. Other opinions say differently.                                                                        
                                                                                                                                
2:07:50 PM                                                                                                                    
SENATOR  PASKVAN  said  the  National  Association  of  Insurance                                                               
Commissioners  says   that  federal  law  mandates   coverage  if                                                               
dependent coverage  is available up  to age  26, and asked  if he                                                               
agreed with that.                                                                                                               
                                                                                                                                
MR. PUCKETT answered that he  didn't know if they were addressing                                                               
a  governmental  plan  or  not. There  is  a  difference  between                                                               
private  insurance  and  a grandfathered  retiree  plan  such  as                                                               
Alaska's.                                                                                                                       
                                                                                                                                
SENATOR PASKVAN  asked if  passing SB 81  avoids a  lawsuit being                                                               
filed.                                                                                                                          
                                                                                                                                
MR.  PUCKETT replied  that  he didn't  know if  it  would make  a                                                               
difference or not.                                                                                                              
                                                                                                                                
SENATOR DAVIS  remarked that she  believes if this bill  does not                                                               
pass the opportunity to file a suit would present itself.                                                                       
                                                                                                                                
SENATOR  PASKVAN  moved  to  report SB  81  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
were no objections and it was so ordered.                                                                                       
                                                                                                                                
2:10:05 PM                                                                                                                    
At ease from 2:10 to 2:20.                                                                                                      
                                                                                                                                
2:12:06 PM