September 13, 2005, Introduced by Rep. Condino and referred to the Committee on Government Operations.
A bill to amend 1957 PA 261, entitled
"Michigan legislative retirement system act,"
by amending sections 75 and 79 (MCL 38.1075 and 38.1079), as
amended by 1998 PA 501.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 75. (1) A qualified participant is immediately 100%
vested in his or her contributions made to Tier 2. A qualified
participant shall vest in the employer contributions made on his or
her behalf to Tier 2 according to the following schedule:
(a) Upon completion of 2 years of service, 50%.
(b) Upon completion of 3 years of service, 75%.
(c) Upon completion of 4 years of service, 100%.
(2) A qualified participant is vested in the health insurance
coverage provided in section 79 if the qualified participant meets
1 of the following requirements:
(a) The qualified participant has completed 6 years of service
as a qualified participant and was not a member, deferred vested
member, or former nonvested member of Tier 1.
(b) The qualified participant was a member, deferred vested
member, or former nonvested member of Tier 1 who made an election
to participate in Tier 2 pursuant to section 61, and who has met
the service requirements he or she would have been required to meet
in order to vest in health benefits under section 50b.
(c) The qualified participant meets all of the following
requirements:
(i) Was not a member, deferred vested member, or former
nonvested member of Tier 1.
(ii) Was first elected to fill a vacancy in the house of
representatives for a period less than the full term but more than
1/2 of the term of office.
(iii) Has completed 5 years of service as a qualified
participant.
(3) A qualified participant who becomes a qualified
participant on or after January 1, 2001 is vested in the health
insurance coverage provided in section 79 if the former qualified
participant has completed 10 years of service as a qualified
participant and was not a member, deferred member, or former
nonvested member of Tier 1.
Sec. 79. (1) A former qualified participant may elect health
insurance benefits in the manner prescribed in this section if he
or she meets both of the following requirements:
(a) The former qualified participant is vested in health
benefits under section 75(2) or (3).
(b) The former qualified participant meets 1 of the following
requirements:
(i) He or she meets or exceeds the benefit commencement age
employed in the actuarial present value calculation under section
62 and the service requirements that would have applied to that
former participant under Tier 1 for receiving health insurance
coverage under section 50b, if that former participant was a member
of Tier 1.
(ii) He or she is 55 years of age or older.
(2) A former qualified participant who is eligible to elect
health insurance coverage under subsection (1) may elect health
insurance coverage in a health benefit plan or plans as authorized
by section 50b, or in another plan as provided in subsection (6). A
former qualified participant who is eligible to elect health
insurance coverage under subsection (1) may also elect health
insurance coverage for his or her health benefit dependents, if
any. A surviving health benefit dependent of a deceased former
qualified participant who is eligible to elect health insurance
coverage under subsection (1) may elect health insurance coverage
in the manner prescribed in this section.
(3) Except as otherwise provided in subsection (6), an
individual who elects health insurance coverage under this section
shall become a member of a health insurance coverage group
authorized pursuant to section 50b.
(4) For a former qualified participant who is eligible to
elect health insurance coverage under subsection (1) and who is
vested in those benefits under section 75(2)(a) or (c), and for his
or her health benefit dependents, this state shall pay a portion of
the health insurance premium as calculated under this subsection on
a cash disbursement method. An individual described in this
subsection who elects health insurance coverage under this section
shall pay to the retirement system the remaining portion of the
health insurance coverage premium not paid by this state under this
subsection. The portion of the health insurance coverage premium
paid by this state under this subsection shall be 90% of the
payments for health insurance coverage under section 50b. If the
individual elects the health insurance coverage provided under
section 50b, this state shall transfer its portion of the amount
calculated under this subsection to the health insurance fund
created by section 22c.
(5) For a former qualified participant who is eligible to
elect health insurance coverage under subsection (1) and who is
vested in those benefits under section 75(2)(b), and for his or her
health benefit dependents, this state shall pay a portion of the
health insurance premium as calculated under this subsection on a
cash disbursement method. An individual described in this
subsection who elects health insurance coverage under this section
shall pay to the retirement system the remaining portion of the
health insurance coverage premium not paid by this state under this
subsection. The portion of the health insurance coverage premium
paid by this state under this subsection shall be equal to the
premium amounts paid on behalf of retirants of Tier 1 for health
insurance coverage under section 50b. If the individual elects the
health insurance coverage provided under section 50b, the state
shall transfer its portion of the amount calculated under this
subsection to the health insurance fund created by section 22c.
(6) For a former qualified participant who is eligible to
elect health insurance coverage under subsection (1) and is vested
in those benefits under section 75(3) and for his or her health
benefit dependents, this state shall pay a portion of the health
insurance premium as calculated under this subsection on a cash
disbursement method. An individual described in this subsection who
elects health insurance coverage under this section shall pay to
the retirement system the remaining portion of the health insurance
coverage premium not paid by this state under this subsection. The
portion of the health insurance coverage premium paid by this state
under this subsection shall be equal to the product of 3% and the
former qualified participant's years of service, up to 30 years,
and shall not exceed 90% of the payments for health insurance
coverage under section 50b.
(7) (6)
A former qualified participant or health benefit
dependent who is eligible to elect health insurance coverage under
this section and who elects health insurance coverage under a
different plan than the plan authorized under section 50b may elect
to have an amount up to the amount of the retirement system's share
of the monthly health insurance premium subsidy provided in this
section paid by the retirement system directly to the other health
insurance plan or to a medical savings account established pursuant
to section 220 of the internal revenue code, to the extent allowed
by law or under the provisions and procedures of Tier 2.
(8) (7)
If the department of management and budget receives
notification from the United States internal revenue service that
this section or any portion of this section will cause the
retirement system to be disqualified for tax purposes under the
internal revenue code, then the portion that will cause the
disqualification does not apply.