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SB-147 School Health Security Account Program.(2003-2004)

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Senate Bill
No. 147

Introduced  by  Senator Torlakson

February 06, 2003

An act to amend Section 25930 of, to add Section 25911 to, and to add Chapter 5 (commencing with Section 25960) to Part 13.5 of Division 1 of Title 1 of, the Education Code, relating to school employee benefits, and making an appropriation therefor.


SB 147, as introduced, Torlakson. School Health Security Account Program.
Existing law establishes the Teachers’ Health Benefit Fund, a continuously appropriated fund, and authorizes the Teachers’ Retirement Board to administer that fund with respect to any health benefits program enacted by the Legislature for members, as defined.
This bill would require the Teachers’ Retirement Board, by July 1, 2005, to establish and administer the Health Security Account Program for school employees who have retired or have reached normal retirement age. The program would reimburse those employees for covered medical expenses, as defined by the board, and would be funded by the employer, if the employer elects to participate, through contributions to the Teachers’ Health Benefits Fund. By increasing contributions to a continuously appropriated fund, the bill would make an appropriation.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


 Section 25911 is added to the Education Code, to read:

 “Board” means the Teachers’ Retirement Board.

SEC. 2.

 Section 25930 of the Education Code is amended to read:

 There is in the State Treasury a special trust fund to be known as the Teachers’ Health Benefits Fund. There shall be deposited in the fund the employer contributions required under subdivision (c) of Section 22950, contributions required under Sections 25962 and 25966, income on investments, other interest income, income from fees and penalties, premiums paid by members, donations, legacies, bequests made to the fund and accepted by the board, and any other amounts provided by this part. Notwithstanding Section 13340 of the Government Code, the proceeds of the fund are hereby continuously appropriated without regard to fiscal year for purposes of this part. The design and administration of the fund and any program financed from the fund shall comply with Section 115 of Title 26 of the United States Code.

SEC. 3.

 Chapter 5 (commencing with Section 25960) is added to Part 13.5 of Division 1 of Title 1 of the Education Code, to read:
CHAPTER  5. Health Security Account Program

 The board shall, on or before July 1, 2005, establish and administer the Health Security Account Program for members who have retired or have reached normal retirement age. The program shall provide those members with reimbursements for covered medical expenses. The design and administration of the program shall conform to applicable provisions of the Internal Revenue Code and the Revenue and Taxation Code.

 As used in this chapter:
(a) Notwithstanding Section 25925, “member” means a current employee, who has reached normal retirement age, or a retired employee of an employer as defined in Section 25921.
(b) “Program” means the Health Security Account Program established by this chapter.

 The board shall establish the rates of contribution, minimum interest rate, if applicable, covered medical expenses, and the extent to which the system shall administer the program or contract with a vendor for services.

 Member accounts under the program shall be nominal accounts. Member contributions and employer contributions on behalf of the member that are specifically identified as creditable to the program shall be treated as credits to the member’s account. The member does not have a right or claim to any specific assets of the account, program, or fund.

 The program shall provide reimbursements for covered medical expenses, as defined by the board, to members whose employers have elected to participate in the program as provided in Section 25965. Reimbursements for covered medical expenses shall also be provided to the spouse and dependents of members. Upon the death of the member, the member’s account balance shall be available to the member’s surviving spouse and dependents for reimbursement of covered medical expenses.

 The governing board of an employer may, by formal action, elect to participate in the program.

 (a) The board shall determine a minimum level of contribution to be made by the employer on behalf of members of the employer.
(b) The board shall determine whether a minimum interest rate is credited to members’ accounts and, if so, the interest rate.

 The board shall adopt regulations to implement the program. The costs of establishing and administering the program shall be paid from employer contributions in the Health Benefits Fund.