STATE EMPLOYEES
RETIREMENT COMMISSION
COMPTROLLER'S SEAL STATE OF CONNECTICUT 55 ELM STREET
HARTFORD, CONNECTICUT
06106-1775
TELEPHONE: (860) 702-3480
TELEFAX:(860) 702-3489
MEDICAL EXAMINING BOARD
for DISABILITY RETIREMENT
HEALTH CARE COST
CONTAINMENT COMMITTEE
STATE OF CONNECTICUT
RETIREMENT AND BENEFIT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER


RETIREMENT & BENEFIT SERVICES DIVISION MEMORANDUM

November 14, 2007

TO THE HEADS OF ALL STATE AGENCIES

ATTENTION: Personnel and Payroll Officers, Business Managers
SUBJECT: HEALTH INSURANCE FOR EMPLOYEES ON WORKERS COMPENSATION WHO RETIRE

I. INTRODUCTION

Connecticut General Statutes Section 31-284b requires covered employers to continue insurance coverage for employees eligible to receive workers compensation. Employees retired from employment with the State of Connecticut and receiving (or eligible to receive) workers compensation benefits are continued on active employee health insurance during the period they are receiving such benefits. These individuals are required to pay the "employee share" of the premium by making payment directly to their former employing agency.

This practice was in effect prior to the Health Care Provisions of the SEBAC V Agreement which modified both the employee and retiree portions of the medical plan insurance premiums. Prior to July 1, 1997 there was no cost to the employee for individual medical plan coverage. On and after that date the employee share of the premium is based on the type of plan and coverage class, and the cost of the selected plan in relation to the cost of the other plans. The Agreement also provided that retired employees would pay a portion of the premium, but at a lower rate than for those actively employed.

II. DISCUSSION

A. ISSUES - The current practice in place to meet the requirements of C.G.S Section 31-284b creates conflicts as follows:

1.Retired employees receiving workers compensation may pay substantially more for health coverage than similarly situated retirees who are not receiving workers compensation.
2.Some retirees eligible for Medicare by reason of age or disability have not enrolled in Medicare Part B on a timely basis, because they are enrolled in active employee health coverage. Currently, when Workers Compensation benefits end, the Division transfers the retiree's coverage to retiree Medicare supplement coverage, and the retiree is required to enroll in Medicare Part B. They are then required by Medicare to pay a late enrollment penalty. Once enrolled in Medicare, the retiree may experience difficulty with claim payments, as there is a conflict as to whether the state employee plan or Medicare is the primary payer. Medicare rules provide that the employer plan is the primary payer based on the individuals "current employment" status. If an individual is not currently employed, and is retired, the primary payer for a retired employee is Medicare. Since Medicare rules also bar an employer from providing Medicare supplement coverage to an employee, there is no coordination of benefits (COB) with Medicare while the retiree is enrolled in the employee plan.
3.Retired employees enrolled in active employee health coverage are required to pay the employee portion of the premium. The employee premium for health coverage cannot be deducted from either workers compensation check or the retirement checks. The retiree is therefore required to make payment to their employing agency by check, while at the same time receiving workers compensation and retirement checks from the state. Additionally, in many cases the agency does not have regular contact with the retired employee and may not be aware of changes that affect retiree coverage.

B. RESOLUTION

1. Non-Disability Retirement - Employees receiving workers compensation who retire with a retirement date on and after January 1, 2008, and who are eligible for retirement health insurance, will transition to retirement health coverage on the same basis and at the same time as any other employee who retires. Retirement health insurance coverage will be effective on the first day of the month following the retirement date.
2. Disability Retirement - Employees receiving workers compensation whose disability retirement is approved on and after January 1, 2008, and who are eligible for retirement health insurance, will transition to retirement health coverage on the same basis as any other employee who retires. Retirement health insurance will be effective on the first day of the second month following approval of the disability retirement application. For example, a disability retirement approved in January 2008 will normally go on the February 2008 Retirement Payroll, and retirement health coverage will be effective March 1, 2008.
3. Retirees Receiving Workers Compensation and Enrolled in Employee Health Insurance Retired employees continuing to receive Workers Compensation benefits and who are currently enrolled in employee health coverage will be transferred to retirement health coverage after January 1, 2008. The Division will coordinate this transfer with the retiree's last employing agency and will contact each affected retiree by mail. Further instructions on this process will be distributed to each agency as necessary.

C. CORE-CT PROCEDURES - Revised Job Aids will be released in the near future advising of the correct Action/Reason codes to be used when an employee receiving Workers Compensation retires.

III. CONCLUSION - Effective on and after January 1, 2008, State Employees receiving Workers Compensation benefits arising from State of Connecticut employment, and who are eligible for Retirement Health Insurance, will transition directly to Retirement Health Insurance upon retirement the same as all other employees who retire. Current retired employees receiving Workers Compensation and enrolled in employee health coverage will be transitioned to retirement health coverage after January 1, 2008 on an agency basis. Agency Personnel and Payroll Officers with questions on this matter are requested to call the Health Care Analysis Unit at (860) 702-3539. Please do not refer employees or retirees to this number.

Very truly yours,

NANCY WYMAN, STATE COMPTROLLER

By:

Thomas C. Woodruff, Ph.D., Director
Retirement & Benefit Services Division

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