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." 2:32:35 PM Co-Chair Seaton MOVED to ADOPT the proposed committee substitute for HB 23, Work Draft 30-LS0258\U (Wayne, 2/10/17). Representative Pruitt OBJECTED for discussion. JANE PIERSON, STAFF, REPRESENTATIVE NEAL FOSTER, discussed the changes in the committee substitute (CS): The first change occurred when the committee passed Amendment 1(a), which changed "health" insurance to "medical" insurance throughout the bill, insuring that the surviving dependents of a fallen officer is granted the same level of medical insurance benefits the deceased employee was receiving at the time of the employee's death as directed by the bill (see, page 3, lines 14-16). The next amendment the committee passed was Amendment 3, as amended. These changes can be found on page 3, lines 14 through 26, which clarify the level of insurance that is required, how payments of premiums shall be paid. Additionally, on page 4, lines 7 through 9 and 13 through 15 large and small municipalities are defined. The next amendment that passed was Amendment 4, on page 3, line 7 that changed age 65 to eligible for Medicare. The committee in passing Amendment 10 changed police to peace officer throughout the bill and defined a peace officer on page 4, lines 10 through 12 to mean an employee occupying a position as a peace officer, chief of police, regional public safety officer, correctional officer, correctional superintendent, or probation officer. The final changes to this bill were made when the committee passed Amendment 13(a) simplifying how money is appropriated to the fund. 2:35:41 PM Co-Chair Foster relayed the committee had passed a number of amendments the previous week, which had been rolled into the current CS. He listed people available to answer questions. He noted that Representative Kawasaki had joined the meeting. Representative Guttenberg pointed to the definition of a peace officer on page 4 line 10. He wanted to ensure there were no unintended consequences caused by the change to the definition. Ms. Pierson answered that the committee had expanded the definition and had not eliminated anything that had been previously in the bill. Representative Guttenberg clarified his question. He wanted to ensure there were not unintended consequences in other places. Co-Chair Foster recognized bill sponsor Representative Andy Josephson in the audience. Ms. Pierson deferred the question to Legislative Legal Services. DANIEL WAYNE, ATTORNEY, LEGISLATIVE LEGAL SERVICES (via teleconference), summarized his understanding of the question. He asked for verification that Representative Guttenberg was asking whether anyone had been dropped from the definition of peace officer. Representative Guttenberg replied in the affirmative. Mr. Wayne answered that he did not believe the change would have any unforeseen consequences. The previous definition had included Department of Transportation and Public Facilities employees and University of Alaska employees who had general police powers to arrest and so forth. He believed the individuals would qualify as peace officers under the bill's updated definition. Vice-Chair Gara asked for verification that Medicaid did not count under the legislation, but Medicare did. LISA WEISSLER, STAFF, REPRESENTATIVE ANDY JOSEPHSON, replied that medical, throughout the bill, referred to the level of coverage at the time of an employee's death, while major medical came into play for ineligibility. She addressed whether Medicare was considered major medical and did not believe it mattered for the purpose - the bill set the criteria and made it quite specific in terms of becoming eligible for major medical or Medicare. 2:40:35 PM Vice-Chair Gara surmised it was the level of health insurance a person had previously and once an individual reached the Medicare eligibility age, they received Medicare. Ms. Weissler replied in the affirmative. Representative Wilson noted Alaska's Medicaid program covered much more than in some other states. She stated that Medicaid would be medical insurance. She believed that it probably would not happen for most of the population impacted by the bill. She surmised that Medicaid would be the same as if the state were providing other insurance. Ms. Pierson replied that she did not believe anyone covered under the policy would qualify for Medicaid because the policy would be in effect. Representative Wilson noted Medicaid did not have anything to do with whether or not a person had insurance. She stated that it was related to the individual's level of income. She detailed that a person qualified for Medicaid if their income was low enough. She noted that Medicaid was an insurance policy and because of the extras provided in Alaska, she wondered if Medicaid would cover the individuals. Ms. Weissler replied she did not know how to answer the question. She referred to a document that had been passed out [by Co-Chair Foster's office] to the committee that included definitions for health, medical, and Medicare (copy on file). Representative Wilson referred to the definition and believed Medicaid would fall under the medical insurance category. Co-Chair Foster recognized Representative Charisse Millett in the audience. 2:43:15 PM Ms. Pierson deferred Representative Wilson's question to Mr. Wayne. Mr. Wayne replied that the definition of major medical, which was included on the handout. He detailed that the document listed Medicare as a major medical plan under AS 21.55.500 (a definitions section relating to health insurance, but not necessarily about health insurance being discussed in the bill); it was the only statutory definition Legislative Legal Services had found. He asked for a repeat of the question. Representative Wilson clarified she was speaking about Medicaid, not Medicare. She specified that Medicaid is based on a person's income - a person could apply for Medicaid at any time. She continued that if a person was eligible, Medicaid covered health insurance, dental, and other extras. She was trying to determine that if a person qualified for Medicaid they would not be eligible for the other insurance under the bill. 2:45:21 PM Ms. Pierson answered that Medicaid was usually the payer of last resort, as long as another insurance was available the person would not qualify for Medicaid. Representative Wilson explained that she had been concerned that an individual may end up going back and forth and could become disqualified when their income changed. It would be a hardship on families if they were passed back and forth between plans. She asked someone to double check that if a person had a health plan that they may be able to receive the supplements and would not be disqualified for the insurance under the bill. Vice-Chair Gara believed Medicaid did not count as the kind of insurance a person would receive under the bill. He reasoned that major medical was defined in AS 21.55.500 as an expense incurred insurance. He relayed that Medicaid was not an expense incurred insurance. 2:46:51 PM Vice-Chair Gara spoke to the three fiscal notes associated with the bill. The first was a zero fiscal note from the Department of Public Safety (DPS). He explained that DPS would manage the fund that funded the benefits provided under the legislation at no cost with existing staff. The next fiscal note had no OMB component number because it was the creation of a new fund called fund capitalization. The note reflected the cost of the program, estimated at $70,100 in FY 18 through FY 23. The last note was for the Department of Administration, Division of Retirement and Benefits and had zero fiscal impact. The Department of Administration would help DPS manage the new fund with existing staff. Co-Chair Seaton MOVED to REPORT CSHB 23(FIN) out of committee with individual recommendations and the accompanying fiscal notes. Representative Pruitt noted he WITHDREW his OBJECTION to the adoption of the CS. There being NO further OBJECTION, CSHB 23(FIN) was REPORTED out of committee with a "do pass" recommendation and with one new zero fiscal note from the Department of Administration; one new zero fiscal note from the Department of Public Safety; and one new fiscal impact note from the Office of the Governor for Fund Capitalization. Co-Chair Foster addressed the schedule for the following meeting.