0001| HOUSE BILL 435 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| JERRY W. SANDEL | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| AN ACT | 0011| RELATING TO RETIREE HEALTH CARE; AMENDING THE RETIREE HEALTH | 0012| CARE ACT TO CHANGE CERTAIN DEFINITIONS AND GIVE THE BOARD OF | 0013| THE RETIREE HEALTH CARE AUTHORITY MORE DISCRETION IN SETTING | 0014| CONTRIBUTION LEVELS; AMENDING SECTIONS OF THE NMSA 1978. | 0015| | 0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0017| Section 1. Section 10-7C-4 NMSA 1978 (being Laws 1990, | 0018| Chapter 6, Section 4, as amended) is amended to read: | 0019| "10-7C-4. DEFINITIONS.--As used in the Retiree Health | 0020| Care Act: | 0021| A. "active employee" means an employee of a public | 0022| institution or any other public employer participating in | 0023| either the Educational Retirement Act, the Public Employees | 0024| Retirement Act, the Judicial Retirement Act [or], the | 0025| Magistrate Retirement Act or the Public Employees Retirement |
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0001| Reciprocity Act or an employee of an independent public | 0002| employer; | 0003| B. "authority" means the retiree health care | 0004| authority created pursuant to the Retiree Health Care Act; | 0005| C. "basic plan of benefits" means only those | 0006| coverages generally associated with a medical plan of | 0007| benefits; | 0008| D. "board" means the [governing] board of the | 0009| retiree health care authority; | 0010| E. "current retiree" means an eligible retiree who | 0011| is receiving a disability or normal retirement benefit under | 0012| the Educational Retirement Act, the Public Employees | 0013| Retirement Act, the Judicial Retirement Act, the Magistrate | 0014| Retirement Act [the Retirement Reciprocity Act, the Judicial | 0015| Retirement Reciprocity Act], the Public Employees Retirement | 0016| Reciprocity Act or the retirement program of an independent | 0017| public employer on or before July 1, 1990; | 0018| F. "eligible dependent" means a person obtaining | 0019| retiree health care coverage based upon that person's | 0020| relationship to an eligible retiree as follows: | 0021| (1) a spouse; | 0022| (2) an unmarried child under the age of | 0023| nineteen who is: | 0024| (a) a natural child; | 0025| (b) a legally adopted child; |
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0001| (c) a stepchild living in the same | 0002| household who is primarily dependent on the eligible retiree | 0003| for maintenance and support; | 0004| (d) a child for whom the eligible | 0005| retiree is the legal guardian and who is primarily dependent | 0006| on the eligible retiree for maintenance and support, as long | 0007| as evidence of the guardianship is evidenced in a court order | 0008| or decree; or | 0009| (e) a foster child living in the same | 0010| household; | 0011| (3) a child described in Subparagraphs (a) | 0012| through (e) of Paragraph (2) of this subsection who is between | 0013| the ages of nineteen and twenty-five and is a full-time | 0014| student at an accredited educational institution, provided | 0015| that "full-time student" shall be a student enrolled in and | 0016| taking twelve or more semester hours or its equivalent contact | 0017| hours in primary, secondary, undergraduate or vocational | 0018| school or a student enrolled in and taking nine or more | 0019| semester hours or its equivalent contact hours in graduate | 0020| school; | 0021| (4) a dependent child over nineteen who is | 0022| wholly dependent on the eligible retiree for maintenance and | 0023| support and who is incapable of self-sustaining employment by | 0024| reason of mental retardation or physical handicap; provided | 0025| that proof of incapacity and dependency shall be provided |
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0001| within thirty-one days after the child reaches the limiting | 0002| age and at such times thereafter as may be required by the | 0003| board; | 0004| (5) a surviving spouse defined as follows: | 0005| (a) "surviving spouse" means the spouse | 0006| to whom a retiree was married at the time of death; or | 0007| (b) "surviving spouse" means the spouse | 0008| to whom a deceased vested active employee was married at the | 0009| time of death; or | 0010| (6) a surviving dependent child who is the | 0011| dependent child of a deceased eligible retiree whose other | 0012| parent is also deceased; | 0013| G. "eligible employer" means either: | 0014| (1) a "retirement system employer", which | 0015| means an institution of higher education, a school district or | 0016| other entity participating in the public school insurance | 0017| authority, a state agency, state court, magistrate court, | 0018| municipality or county, each of which is affiliated under or | 0019| covered by the Educational Retirement Act, the Public | 0020| Employees Retirement Act, the Judicial Retirement Act [or], | 0021| the Magistrate Retirement Act or the Public Employees | 0022| Retirement Reciprocity Act; or | 0023| (2) an "independent public employer", which | 0024| means a municipality or county [which] that is not a | 0025| retirement system employer; |
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0001| H. "eligible retiree" means: | 0002| (1) a "nonsalaried eligible participating | 0003| entity governing authority member" who is a person who is not | 0004| a retiree and who: | 0005| (a) has served without salary as a | 0006| member of the governing authority of an employer eligible to | 0007| participate in the benefits of the Retiree Health Care Act and | 0008| is certified to be such by the executive director of the | 0009| public school insurance authority; | 0010| (b) has maintained group health | 0011| insurance coverage through that member's governing authority | 0012| if such group health insurance coverage was available and | 0013| offered to the member during the member's service as a member | 0014| of the governing authority; and | 0015| (c) was participating in the group | 0016| health insurance program under the Retiree Health Care Act | 0017| prior to July 1, 1993; or | 0018| (d) if a person eligible under | 0019| Subparagraph (a) of this paragraph applies before August 1, | 0020| 1993 to the authority to participate in the program, then he | 0021| will be eligible to participate notwithstanding the provisions | 0022| of Subparagraphs (b) and (c) of this paragraph; | 0023| (2) a "salaried eligible participating entity | 0024| governing authority member" who is a person who is not a | 0025| retiree and who: |
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0001| (a) has served with salary as a member | 0002| of the governing authority of an employer eligible to | 0003| participate in the benefits of the Retiree Health Care Act; | 0004| (b) has maintained group health | 0005| insurance through that member's governing authority, if such | 0006| group health insurance was available and offered to the member | 0007| during the member's service as a member of the governing | 0008| authority; and | 0009| (c) was participating in the group | 0010| health insurance program under the Retiree Health Care Act | 0011| prior to July 1, 1993; or | 0012| (d) if a person eligible under | 0013| Subparagraph (a) of this paragraph applies before August 1, | 0014| 1993 to the authority to participate in the program, then he | 0015| will be eligible to participate notwithstanding the provisions | 0016| of Subparagraphs (b) and (c) of this paragraph; or | 0017| (3) an "eligible participating retiree" who | 0018| is a person who: | 0019| (a) falls within the definition of a | 0020| retiree, has made contributions to the fund for at least five | 0021| years prior to retirement and whose eligible employer during | 0022| that period of time made contributions as a participant in the | 0023| Retiree Health Care Act on the person's behalf, unless that | 0024| person retires on or before July 1, 1995, in which event the | 0025| time period required for employee and employer contributions |
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0001| shall become the period of time between July 1, 1990 and the | 0002| date of retirement, and who is certified to be a retiree by | 0003| the educational retirement director, the executive secretary | 0004| of the public employees retirement board or the governing | 0005| authority of an independent public employer; | 0006| (b) falls within the definition of a | 0007| retiree, retired prior to July 1, 1990 and is certified to be | 0008| a retiree by the educational retirement director, the | 0009| executive secretary of the public employees retirement | 0010| association or the governing authority or of an independent | 0011| public employer; but this paragraph does not include a retiree | 0012| who was an employee of an eligible employer who exercised the | 0013| option not to be a participating employer pursuant to the | 0014| Retiree Health Care Act and did not after January 1, 1993 | 0015| elect to become a participating employer; unless the retiree: | 0016| 1) retired on or before June 30, 1990; and 2) at the time of | 0017| retirement did not have a retirement health plan or retirement | 0018| health insurance coverage available from his employer; or | 0019| (c) is a retiree who: 1) was at the | 0020| time of retirement an employee of an eligible employer who | 0021| exercised the option not to be a participating employer | 0022| pursuant to the Retiree Health Care Act, but which eligible | 0023| employer subsequently elected after January 1, 1993 to become | 0024| a participating employer; 2) has made contributions to the | 0025| fund for at least five years prior to retirement and whose |
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0001| eligible employer during that period of time made | 0002| contributions as a participant in the Retiree Health Care Act | 0003| on the person's behalf, unless that person retires less than | 0004| five years after the date participation begins, in which event | 0005| the time period required for employee and employer | 0006| contributions shall become the period of time between the date | 0007| participation begins and the date of retirement; and 3) is | 0008| certified to be a retiree by the educational retirement | 0009| director, the executive secretary of the public employees | 0010| retirement board or the governing authority of an independent | 0011| public employer; | 0012| I. "fund" means the retiree health care fund; | 0013| J. "group health insurance" means coverage that | 0014| includes but is not limited to life insurance, accidental | 0015| death and dismemberment, hospital care and benefits, surgical | 0016| care and treatment, medical care and treatment, dental care, | 0017| eye care, obstetrical benefits, prescribed drugs, medicines | 0018| and prosthetic devices, medicare supplement, medicare | 0019| carveout, medicare coordination and other benefits, supplies | 0020| and services through the vehicles of indemnity coverages, | 0021| health maintenance organizations, preferred provider | 0022| organizations and other health care delivery systems as | 0023| provided by the Retiree Health Care Act and other coverages | 0024| considered by the board to be advisable; | 0025| K. "ineligible dependents" include but are not |
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0001| limited to: | 0002| (1) those dependents created by common law | 0003| relationships; | 0004| (2) dependents while in active military | 0005| service; | 0006| (3) parents, aunts, uncles, brothers, | 0007| sisters, grandchildren and other family members left in the | 0008| care of an eligible retiree without evidence of legal | 0009| guardianship; and | 0010| (4) anyone not specifically referred to as an | 0011| eligible dependent pursuant to the rules and regulations | 0012| adopted by the board; | 0013| L. "participating employee" means an employee of a | 0014| participating employer, which employee has not been excluded | 0015| from participation in the Retiree Health Care Act pursuant to | 0016| Subsection F of Section 10-7C-9 NMSA 1978 or Section | 0017| 10-7C-10 NMSA 1978; | 0018| M. "participating employer" means an eligible | 0019| employer who has satisfied the conditions for participating in | 0020| the benefits of the Retiree Health Care Act, including the | 0021| requirements of Subsection M of Section 10-7C-7 NMSA 1978 and | 0022| Subsection D or E of Section 10-7C-9 NMSA 1978, as applicable; | 0023| and | 0024| N. "retiree" means a person who: | 0025| (1) is receiving: |
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0001| (a) a disability or normal retirement | 0002| benefit or survivor's benefit under the Educational Retirement | 0003| Act; | 0004| (b) a disability or normal retirement | 0005| benefit or survivor's benefit pursuant to the Public Employees | 0006| Retirement Act, the Judicial Retirement Act, the Magistrate | 0007| Retirement Act [the Retirement Reciprocity Act or the | 0008| Judicial Retirement Reciprocity Act] or the Public Employees | 0009| Retirement Reciprocity Act; or | 0010| (c) a disability or normal retirement | 0011| benefit or survivor's benefit pursuant to the retirement | 0012| program of an independent public employer to which that | 0013| employer has made periodic contributions; or | 0014| (2) is not receiving a survivor's benefit but | 0015| is the eligible dependent of a person who received a | 0016| disability or normal retirement benefit pursuant to the | 0017| Educational Retirement Act [or], the Public Employees | 0018| Retirement Act, the Judicial Retirement Act, the Magistrate | 0019| Retirement Act or the Public Employees Retirement Reciprocity | 0020| Act." | 0021| Section 2. Section 10-7C-7 NMSA 1978 (being Laws 1990, | 0022| Chapter 6, Section 7, as amended) is amended to read: | 0023| "10-7C-7. BOARD--DUTIES.--In order to achieve the | 0024| purposes of the Retiree Health Care Act, the board may take | 0025| all actions reasonably necessary to implement that act, |
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0001| including but not limited to the following: | 0002| A. employ or contract for the services of the | 0003| state fiscal agent or select its own fiscal agent in | 0004| accordance with the Procurement Code; | 0005| B. employ or contract for persons to assist it in | 0006| carrying out the Retiree Health Care Act and determine the | 0007| duties and compensation of these employees; | 0008| C. collect and disburse funds; | 0009| D. collect all current and historical claims and | 0010| financial information necessary for effective procurement of | 0011| lines of insurance coverage; | 0012| E. promulgate and adopt necessary rules, | 0013| regulations and procedures for implementation of the Retiree | 0014| Health Care Act; | 0015| F. negotiate insurance policies covering | 0016| additional or lesser benefits as determined appropriate by the | 0017| board, but the board shall maintain all coverage as required | 0018| by federal or state law for each eligible retiree. In the | 0019| event it is practical to wholly self-insure part or all of the | 0020| retiree health care coverages, the board may do so; | 0021| G. procure group health care and other coverages | 0022| authorized by the Retiree Health Care Act in accordance with | 0023| the Procurement Code and the Health Care Purchasing Act; | 0024| H. establish the procedures for contributions and | 0025| deductions; |
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0001| I. determine methods and procedures for claims | 0002| administration; | 0003| J. administer the fund; | 0004| K. contract for and make available to all eligible | 0005| retirees and eligible dependents basic and optional group | 0006| health insurance plans. The optional coverage may include a | 0007| lower deductible, lower coinsurance or additional categories | 0008| of benefits permitted under this section and all other | 0009| applicable sections of the Retiree Health Care Act to provide | 0010| additional levels of coverages and benefits. Any additional | 0011| contributions for these optional plans shall be paid for by | 0012| the eligible retiree or eligible dependent. The coverage | 0013| provided by the plans shall be secondary to all other benefit | 0014| coverages to which the eligible retiree or eligible dependent | 0015| is entitled. In the event a covered eligible retiree becomes | 0016| employed by an employer offering its employees a basic plan of | 0017| benefits, the coverage provided by the plan under the Retiree | 0018| Health Care Act shall be secondary to such coverage regardless | 0019| of whether the employee enrolls in that employer's plan. In | 0020| the event the eligible retiree or eligible dependent is | 0021| entitled to receive medicare hospital insurance benefits at no | 0022| charge, then the coverage provided by the plan under the | 0023| Retiree Health Care Act shall be secondary to medicare | 0024| hospital and medical insurance to the extent permitted by | 0025| federal law; |
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0001| L. provide, at its discretion, different plans for | 0002| eligible retirees and eligible dependents covered by medicare | 0003| than the plans provided for eligible retirees and eligible | 0004| dependents who are not covered by medicare; and | 0005| M. promulgate and adopt rules and regulations | 0006| governing eligibility, participation, enrollment, length of | 0007| service and any other conditions or requirements for providing | 0008| substantially equal treatment to participating employers [who | 0009| are independent public employers and their retirees and | 0010| participating employees]." | 0011| Section 3. Section 10-7C-9 NMSA 1978 (being Laws 1990, | 0012| Chapter 6, Section 9, as amended) is amended to read: | 0013| "10-7C-9. PARTICIPATION.-- | 0014| A. All eligible employers shall participate in the | 0015| Retiree Health Care Act except as provided in Subsection D or | 0016| Subsection E of this section. Participating employers are | 0017| required to continue existing group health insurance coverages | 0018| until such time as similar coverages are offered by the board | 0019| [under the Retiree Health Care Act]. | 0020| B. Participation in the basic health insurance | 0021| coverages provided by the authority shall be conditioned upon | 0022| receipt by the board of a certificate of eligibility from the | 0023| educational retirement director, the executive secretary of | 0024| the public employees retirement association, the executive | 0025| director of the public school insurance authority or the |
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0001| governing body of an independent public employer. Once | 0002| eligibility is established for each eligible retiree [who | 0003| retires on or after the effective date of the Retiree Health | 0004| Care Act], the board shall contribute from money in the fund | 0005| the authority's portion of the premium for the basic plan of | 0006| benefits commencing no earlier than January 1, 1991 plus the | 0007| balance of the premium, which shall be collected from the | 0008| retiree. | 0009| C. Each eligible retiree shall accept or reject | 0010| enrollment in the basic plan of benefits on an enrollment form | 0011| provided by the board. An eligible retiree who rejects | 0012| enrollment or fails to return a properly executed enrollment | 0013| form within the open enrollment period as established by the | 0014| board forfeits all entitlement and eligibility for benefits | 0015| under the Retiree Health Care Act until the next open | 0016| enrollment period as established by the board. | 0017| D. On or before January 1, 1991, municipalities, | 0018| counties and institutions of higher education that are | 0019| retirement system employers may at their option determine by | 0020| ordinance, or for institutions of higher education, by | 0021| resolution, to be excluded from coverage under the Retiree | 0022| Health Care Act; that determination shall be subject to the | 0023| following conditions: | 0024| (1) any contributions paid into the fund by a | 0025| municipality, county or institution of higher education that |
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0001| exercises timely an irrevocable option not to participate in | 0002| the Retiree Health Care Act under this subsection shall be | 0003| returned without interest to that municipality, county or | 0004| institution of higher education for return of the employee | 0005| contributions to the employees and for crediting of the | 0006| employer contributions to the appropriate fund of the | 0007| municipality, county or institution of higher education. If | 0008| the determination to be excluded from coverage is exercised by | 0009| a municipality, county or institution of higher education | 0010| prior to July 1, 1990, then that municipality, county or | 0011| institution of higher education shall not be required to make | 0012| the contributions that would otherwise be required by Section | 0013| 10-7C-15 NMSA 1978; | 0014| (2) any municipality, county or institution | 0015| of higher education, in addition to complying with all other | 0016| required notice and public hearing or meeting requirements, | 0017| shall, no less than thirty days prior to the public hearing or | 0018| public meeting on a proposed ordinance or proposed resolution, | 0019| notify the authority of the public hearing or public meeting | 0020| by certified mail; and | 0021| (3) in the event that: | 0022| (a) the number of active employees | 0023| employed by municipalities contributing to the fund reaches a | 0024| number equaling sixty percent or more of all active employees | 0025| employed by all municipalities that are retirement system |
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0001| employers, the municipal position on the board of the | 0002| authority shall be restored within sixty days of the date that | 0003| percentage is reached; provided, however, that if a | 0004| municipality with a population greater than one hundred | 0005| thousand that is located in a class A county exercises this | 0006| option, then the sixty-percent requirement shall be applied to | 0007| the remaining municipalities only; | 0008| (b) the number of active employees | 0009| employed by counties contributing to the fund reaches a number | 0010| equaling sixty percent or more of all active employees | 0011| employed by all counties that are retirement system employers, | 0012| the county position on the board of the authority shall be | 0013| restored within sixty days of the date that percentage is | 0014| reached; provided, however, that if a class A county exercises | 0015| this option, then the eighty-percent requirement shall be | 0016| applied to the remaining counties only; or | 0017| (c) the number of active employees | 0018| employed by institutions of higher learning contributing to | 0019| the fund reaches a number equaling seventy percent or more of | 0020| all active employees employed by an institution of higher | 0021| education contributing to the educational retirement fund, the | 0022| institution of higher education position on the board shall be | 0023| restored within sixty days of the date that percentage is | 0024| reached. | 0025| E. An independent public employer may become a |
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0001| participating employer if that employer satisfies the | 0002| requirements imposed pursuant to Subsection M of Section | 0003| 10-7C-7 NMSA 1978 and if that employer also files with the | 0004| authority on or prior to January 1, 1991 or prior to July 1, | 0005| 1993 or July 1 of any year a written irrevocable election by | 0006| the governing body of that employer to participate in the | 0007| Retiree Health Care Act. Any such independent public employer | 0008| that chooses to become a participating employer after January | 0009| 1, 1993 shall begin making the appropriate preliminary | 0010| employer and employee contributions to the fund on the July 1 | 0011| immediately following the adoption of the ordinance or | 0012| resolution. On the following January 1, eligible retirees of | 0013| those participating employers and their eligible dependents | 0014| shall be eligible to receive group health insurance coverage | 0015| pursuant to the provisions of the Retiree Health Care Act. | 0016| F. Any other provisions of the Retiree Health Care | 0017| Act notwithstanding, retirees [or active employees] of | 0018| institutions of higher education participating in the Retiree | 0019| Health Care Act for whom those institutions of higher | 0020| education have existing plans, programs, policies or contracts | 0021| for health care benefits shall not be required to participate | 0022| in the Retiree Health Care Act [nor shall employer or | 0023| employee contributions be made to the authority on their | 0024| behalf]. | 0025| G. A municipality or county that enacted an |
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0001| ordinance or an institution of higher education that enacted a | 0002| resolution prior to January 1, 1991 pursuant to Subsection D | 0003| of this section to be excluded from coverage under the Retiree | 0004| Health Care Act may [enact] become a participating employer | 0005| if that employer satisfies the requirements imposed pursuant | 0006| to subsection M of Section 10-7C-7 NMSA 1978 and if that | 0007| employer also enacts an ordinance or resolution, as | 0008| applicable, after a public hearing and published notice of the | 0009| hearing, prior to July 1, 1993 or July 1 of any year to choose | 0010| to become a participating employer under the Retiree Health | 0011| Care Act. Any such municipality, county or institution of | 0012| higher education that chooses to become a participating | 0013| employer after January 1, 1993 shall begin making the | 0014| appropriate preliminary employer and employee contributions | 0015| to the fund on the July 1 immediately following the adoption | 0016| of the ordinance or resolution. On the following January 1, | 0017| eligible retirees of those participating employers and their | 0018| eligible dependents shall be eligible to receive group health | 0019| insurance coverage pursuant to the provisions of the Retiree | 0020| Health Care Act." | 0021| Section 4. Section 10-7C-15 NMSA 1978 (being Laws 1990, | 0022| Chapter 6, Section 15) is amended to read: | 0023| "10-7C-15. RETIREE HEALTH CARE FUND CONTRIBUTIONS.-- | 0024| A. Following completion of the preliminary | 0025| contribution period, each participating employer for the |
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0001| fiscal year beginning July 1, 1990 and thereafter shall make | 0002| contributions to the fund in the amount of one percent of each | 0003| participating employee's annual salary. | 0004| B. Following completion of the preliminary | 0005| contribution period, each participating employee as a | 0006| condition of employment for the fiscal year commencing July 1, | 0007| 1990 and thereafter shall contribute to the fund an employee | 0008| contribution in an amount equal to one-half of one percent of | 0009| the employee's salary. Each month, participating employers | 0010| shall deduct the contribution from the participating | 0011| employee's salary and shall remit it to the board as provided | 0012| by any procedures that the board may require. | 0013| C. A participating employer that fails to remit | 0014| before the tenth day after the last day of the month all | 0015| employer and employee deposits required by the Retiree Health | 0016| Care Act to be remitted by the employer for the month shall | 0017| pay to the fund, in addition to the deposits, interest on the | 0018| unpaid amounts at the rate of six percent per [annum] year | 0019| compounded monthly. | 0020| D. The employer and employee contributions shall | 0021| be paid in monthly installments based on the percent of | 0022| payroll certified by the employer. | 0023| E. Except in the case of erroneously made | 0024| contributions or as may be otherwise provided in Subsection D | 0025| of Section [9 of the Retiree Health Care Act] 10-7C-9 NMSA |
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0001| 1978, contributions from participating employers and | 0002| participating employees shall become the property of the fund | 0003| on receipt by the board and shall not be refunded under any | 0004| circumstances, including termination of employment or | 0005| termination of the participating employer's operation or | 0006| participation in the Retiree Health Care Act. | 0007| F. Notwithstanding any other provision in the | 0008| Retiree Health Care Act and at the first session of the | 0009| legislature following July 1, 1995, the legislature shall | 0010| review and adjust the distribution pursuant to Section 7-1-6.1 | 0011| NMSA 1978 and the employer and employee contributions to the | 0012| authority in order to [insure] ensure the actuarial | 0013| soundness of the benefits provided under the Retiree Health | 0014| Care Act." | 0015| Section 5. Section 10-7C-16 NMSA 1978 (being Laws 1990, | 0016| Chapter 6, Section 16, as amended) is amended to read: | 0017| "10-7C-16. RETIREE HEALTH CARE FUND--BUDGET.-- | 0018| Expenditures for the administration of the Retiree Health Care | 0019| Act shall be made as provided by an operating budget adopted | 0020| by the board and approved by the state budget division of the | 0021| department of finance and administration as provided by law | 0022| and pursuant to appropriation by the legislature. [For the | 0023| development and administration of the program, up to ten full- | 0024| time equivalents are hereby authorized by the legislature.]" | 0025|  |
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