§ 36-12-4.1. Coverage of Medicare-eligible retired employees.

(a) The director of the department of administration shall ensure retired employees access to Medicare-eligible retiree healthcare insurance. Under this program, the state will establish a health reimbursement account (HRA) funded by state contributions for each Medicare-eligible state retiree who elects to receive healthcare insurance through the state-sponsored program.

(b) The funds contained in the HRA may be utilized for any eligible medical care expenses as defined in § 213(d) of the Internal Revenue Code of 1986, as amended, which includes reimbursements for healthcare insurance premiums.

(c) The director of the department of administration shall procure services to maximize consumer choice and options with respect to the individual policies available to Medicare-eligible retirees.

(d) The maximum state contribution to each Medicare-eligible state retiree€™s HRA account will be equal to the lowest-cost Medicare supplemental plan that is filed with the Office of the Health Insurance Commissioner of Rhode Island, that is available through the state-sponsored program, and that meets the provisions of the Medicare-eligible retiree healthcare insurance benefit defined in § 36-12-1(9). The maximum state contribution will vary by age as specified by the rates set forth in the Medicare supplemental plan filing.

(e) For Medicare-eligible state retirees who retired before September 30, 2008, effective January 1, 2014, the state of Rhode Island will credit an amount to each retiree€™s HRA account on a monthly basis. The amount of such credit shall be calculated based on the retiree€™s years of service, as a percentage of the maximum state contribution set forth in (d) above, and in accordance with the following formula:

(f) For Medicare-eligible state retirees who retire on or after October 1, 2008, effective January 1, 2014, the state of Rhode Island will credit monthly an amount to each retiree€™s HRA account equal to 80% of the maximum state contribution set forth in (d) above, provided the retiree has a minimum of twenty (20) years of service and is at least fifty-nine (59) years of age.

(g) Medicare-eligible teacher retirees may purchase the individual policies available to Medicare-eligible state retirees under the state-sponsored program.