SB 48-INSURANCE FOR DEPENDENTS OF DECEASED FIRE/POLICE  3:31:22 PM CHAIR DUNLEAVY announced the consideration of SB 48. 3:31:42 PM SENATOR JOHN COGHILL, Alaska State Legislature, Juneau, Alaska, sponsor of SB 48, provided an overview of SB 48 as follows: SB 48 is an answer to a problem that has been in the building for some time and that is how to get insurance benefits for survivors of police officers and firefighters. Hearing those horrible times when through no fault of their own, somebody is killed in the line of action; there was a couple of different ways to look at it, what we chose to do was to follow the lead of the administration and try to figure out a way to establish a fund that could be used by the Department of Public Safety to take care of state employees through that funding process. So you will see in here the rules how that fund would work and what the qualifications are. Currently the surviving [beneficiaries lose services] immediately; well, that's just not acceptable. Not only do you have a devastating loss in your life, but also you find yourself in this real awkward spot of asking for something that you should be a natural matter of course. So this legislation has been a topic of some conversation for the last year and certainly I felt the pressure for it, the need for it, and the politics of it quite frankly during the campaign season; but, I made a commitment that if there's an answer we should find it and this is the answer, the solution that we've come up with that would continue medical insurance coverage for the spouse and dependents, and it gives some of the qualification timelines for that. 3:33:59 PM JORDAN SHILLING, Staff, Senator John Coghill, Alaska State Legislature, Juneau, Alaska, provided a sectional analysis of SB 48, Version J, as follows: Section 1  Sec. 39.60.010 - Police officer and firefighter survivors' fund established: The police officer and firefighter survivors' fund is established for the purpose of paying medical insurance premiums for an eligible surviving spouse or dependent child of a police officer or firefighter. The Department of Public Safety shall create two separate accounts within the fund: a state employee account and a municipal employee account. The accounts can consist of legislative appropriations, private donations, and municipal contributions. Sec. 39.60.020 - Powers and duties of the commissioner: Annually, the Commissioner of the Department of Public Safety shall determine the amount of money necessary to pay premiums to eligible surviving dependents. Sec. 39.60.030 - Payment authorized: The Commissioner of the Department of Public Safety may use money in the fund to pay medical insurance premiums for eligible surviving dependents. Sec. 39.60.040 - Eligibility of surviving dependents of police officers and firefighters for medical insurance premiums: A surviving dependent may apply to the commissioner for payment of medical insurance premiums. The commissioner will make a determination of eligibility within 30 days of receiving the application. A surviving dependent is eligible if: · At the time of death, the police officer or firefighter was a year-round, permanent full-time employee of the state or municipality that has opted into this fund; · At the time of death, the surviving dependent was receiving employer-sponsored medical insurance benefits; · The proximate cause of the employee's death is a bodily injury sustained or a hazard undergone while in the performance and within the scope of the employee's duties; and · The injury or hazard is not the proximate result of willful negligence by the employee. A surviving spouse becomes ineligible upon becoming eligible to receive major medical insurance coverage by other means, or reaches 65 years of age - whichever comes first. A surviving dependent child becomes ineligible upon becoming eligible to receive major medical insurance coverage by other means, or reaches 26 years of age - whichever comes first. The commissioner shall pay the premium for the level of medical insurance coverage existing at the time of death, beginning the first month following the date the dependent applied to the fund. Payment of premiums will be made directly to the medical insurance provider. Sec. 39.60.050 - Municipal election to participate in police officer and firefighter survivors' fund: A municipality may elect to participate in the fund. The commissioner shall determine the amount and frequency of the municipality's required contributions to the fund, based on the anticipated cost. A surviving dependent is not eligible for payments unless the municipality opts into the fund. Sec. 39.60.060 - Eligibility of municipal police officers and firefighters: A surviving dependent of a police officer or firefighter who was employed by a municipality may be eligible for payment if immediately after the time of death the municipality elects to participate in the fund, and, at the time of death, the police officer or firefighter was receiving employer-sponsored medical insurance. Sec. 39.60.070 - Terms of agreement by municipality to participate in fund: An agreement between the commissioner and a municipality must include a requirement that the municipality contribute to the fund as needed, be current with contributions, and comply with all other rules and regulations. Sec. 39.60.190 - Definitions: Definitions for "child", "commissioner", "department", "dependent", "firefighter", "fund", "police officer", and "surviving spouse". Section 2  AS 44.41.020 - Powers and duties of department (new subsection): The Department of Public Safety shall manage and administer the fund in cooperation with the Department of Administration. Section 3  Uncodified law: The commissioner of public safety may adopt regulations necessary to implement secs. 1 and 2 of this Act. The regulations take effect under the Administrative Procedure Act, but not before the effective date of sections 1 and 2. Section 4  Effective date: Section 3 takes effect immediately. Section 5  Effective date: Sections 1 and 2 take effect July 1, 2017. 3:41:23 PM SENATOR WILSON addressed volunteer firefighters and asked if municipalities will be able to contribute into the proposed fund. MR. SHILLING replied as follows: When you look at the definition of "firefighter" and "police officer," under the bill as written now if the individual that you are referring to is an employee of the state or is an employee of a municipality that has chosen to opt in and they are eligible under the other provisions in the bill then yes, my guess is they would be eligible for a benefit. SENATOR WILSON noted page 4, line 15 in the bill as follows: At the time of death, the police officer or firefighter was eligible for and receiving employer- sponsored medical insurance. He opined that since the firefighters are volunteers they would not receive the benefit. MR. SHILLING asked Senator Wilson if the volunteers that he is referencing are employees of a municipality. SENATOR WILSON explained that the individuals are volunteers and do not receive the full benefits of their fulltime counterparts. MR. SHILLING explained that the bill as designed is for state and municipal employees that are fulltime, permanent, and work year-round. SENATOR WILSON commented that volunteer firefighters risk their lives just as much as a fulltime employee. 3:44:12 PM SENATOR COGHILL stated that his office will find out what is currently available to volunteers and the possibilities for coverage under the proposed fund. CHAIR DUNLEAVY opined that volunteer firemen would not qualify under the bill as currently written if the volunteers are not employees or employed by a municipality. MR. SHILLING answered correct. CHAIR DUNLEAVY asked what the practice has been since statehood when a police officer or firefighters dies in the line of service. He inquired if something has happened where benefits have been diminished. MR. SHILLING stated that there is currently a benefit provided, but not for medical insurance premiums which is what SB 48 envisions. He opined that recent deaths may be the reason why the issue has been brought forward. He recommended that the Department of Law also address Chair Dunleavy's question. 3:46:54 PM JOAN WILKERSON, Assistant Attorney General, Alaska Department of Law, Juneau, Alaska, responded that the survivor-health benefits has been afforded before. She noted that the benefit is exclusively available to families of Tier I employees. CHAIR DUNLEAVY asked Ms. Wilkerson to address the recent issue for the survivors' health benefits. MS. WILKERSON stated that there is a void that needs to be filled. CHAIR DUNLEAVY asked Mr. Shilling to address how the fund is funded. 3:49:30 PM MR. SHILLING specified that on page 2, line 1, two separate accounts are created where one is for the purpose of paying benefits to state-employee survivors and the other is to pay benefits to municipal-employee survivors. He detailed that appropriations can be made into both accounts by the Legislature as well as donations. He pointed out that the unique one is under the municipal employee-survivor account where municipalities, if opted in, can contribute money into the account for the purposes of paying the benefit to eligible dependents. CHAIR DUNLEAVY noted that the language says the state or municipality "may appropriate" and interpreted the wording as meaning the state or municipality does not have to appropriate. MR. SHILLING answered correct. He said the use of the word "may" is pervasive throughout the bill and that is to ensure that nothing is being done that creates a dedicated fund. He pointed out that the money can be reappropriated by a future legislature. CHAIR DUNLEAVY asked what the estimated amount is to start the fund. MR. SHILLING replied that $70,000 is currently required for 3- dependent families. 3:51:00 PM At ease. 3:51:44 PM CHAIR DUNLEAVY called the committee back to order. He asked Mr. Shilling to readdress the fund's initial budget amount. MR. SHILLING specified that the $70,116 fiscal note is split among 3-dependent surviving families. CHAIR DUNLEAVY asked if new funding would have to be appropriated for future survivor-health benefits. SENATOR COGHILL detailed that the commissioner will have to make an assessment on an annual basis to make an adjustment for an appropriation. He noted that Chair Dunleavy's question hit upon one of the reasons why the bill in going with a fund approach rather than an actuarial approach. MR. SHILLING added that the Legislature could put in additional money that was necessary for a fiscal year to front-load the fund in order to accommodate for an untimely death. CHAIR DUNLEAVY asked how the fund will be managed out of the commissioner's office or the Department of Revenue. MR. SHILLING replied that the bill has the Department of Public Safety's commissioner managing the fund, but doing so in cooperation with the Department of Administration. SENATOR WILSON asked if consideration has been given to manage the fund with a bit more oversite than just one individual. 3:54:39 PM MR. SHILLING answered that the sponsor's office has talked about what Senator Wilson addressed. He noted that the Senate State Affairs Committee can add more oversite. SENATOR WILSON addressed the "police" definition in the bill and asked if Village Safety Police Officers (VPSOs) are also covered. MR. SHILLING answered no. He detailed that VPSOs are not employees of the state. He added that VPSOs are not covered under the state's Public Employees' Retirement System (PERS). He noted that VPSOs have not been covered under previous iterations of the bill as well. CHAIR DUNLEAVY asked Mr. Shilling why the bill's approach is the way to go. He noted that other ways are possible, including a life-insurance policy approach. MR. SHILLING disclosed that the approach originated from one of the administration's working groups over the interim. He pointed out that there were some issues with past approaches that amended the PERS program. He set forth that the case-by-case approach in the bill allows for more flexibility, allows the Legislature to have more control, and provides more flexibility to the municipalities who have the option of opting in. 3:56:49 PM SENATOR COGHILL added that the approach in the bill is a premium-payment method. He said the intent is not to be the insurer, but to quickly get the survivors insurance. He set forth that the flexibility provides for as immediate action as possible. He admitted that one of the saddest things that his office found out from the recent tragedies was that the insurance stopped as soon as the deaths were certified and that is why flexibility is needed at the commissioner's office to get the premium in as soon as practical. He summarized that the methodology in the bill is more nimble, but an annual appropriation will be required. CHAIR DUNLEAVY asked if the annual appropriation can vary depending upon the unfortunate situation of having families in need of insurance. He added that the appropriation could rise or fall based on the number of dependents in a family as well. MR. SHILLING answered yes. 3:58:15 PM At ease. 3:58:43 PM CHAIR DUNLEAVY called the committee back to order. He announced that SB 48 will be set aside with notice for public testimony for the committee's next meeting. SENATOR COGHILL added that testimony from the Department of Public Safety will be included in the next meeting as well. He said he noticed a couple of places in the bill where changes could be made to make the legislation better. 3:59:35 PM CHAIR DUNLEAVY announced he would hold SB 48 in committee for future consideration.