The Alaska Legislature has begun considering a proposal to grant permanent health insurance to the spouses and children of firefighters and police who are killed in the line of duty.
On Thursday morning, committees in the House and Senate began considering House Bill 4002 and Senate Bill 4002, respectively. The identical bills were introduced by Gov. Bill Walker and are advancing down parallel tracks in each body of the Legislature to speed passage.
“There are some gaps in the current terms of our retirement plan that do not provide that coverage,” said Department of Administration Commissioner Sheldon Fisher, explaining the need for the bill.
The bill has a narrow focus. It only covers peace officers and firefighters who die in the line of duty and are members of the Public Employees Retirement System. That includes corrections officers and some municipal police and firefighters, but it does not include Village Public Safety Officers and many volunteer firefighters.
Fisher told the Senate State Affairs Committee that those restrictions come for two reasons. The first is cost.
According to estimates provided Thursday to the House Labor and Commerce Committee in its hearing on the bill, the measure is expected to cost just $174,000 in the fiscal year that starts July 1. Costs would rise slowly over the next few years, reaching $226,000 per year by fiscal year 2022.
The second reason for the restriction is federal rules on benefits. Were the PERS system to offer this type of death benefit to VPSOs, the program could lose its tax-exempt status. That’s because the VPSO program is run under contract with various Native organizations, and IRS rules place limits on benefits for contract employees.
“I think that in light of both the history and the limitations that we have available to us, we felt like this was the appropriate, right step and the priority at this time,” Fisher said.
The gap in survivor benefits has been noticed for several years.
A previous version of the bill was considered under the administration of fomer Gov. Sean Parnell, but that version would have covered every public employee killed on the job. Costs were expected to be high, and the legislation was never approved by the Legislature.
The idea was revived after the recent high-profile deaths of several Alaska State Troopers on the job. It was pushed onto the special session agenda at the urging of several legislators.
“The view was the cost of the bill … was low, and the benefit was meaningful, so it made sense to bring it forward in the special session,” Fisher said.
The bills are expected to advance to the House and Senate finance committees as soon as next week and could face floor votes soon afterward.
Reinsurance also discussed
In a separate hearing Thursday, the House Finance Committee considered HB 374, a measure that would address the costs of the program that provides insurance for “high risk” Alaskans. The reinsurance program would be modified “to provide a mechanism to help insurers spread the risk of high-cost claims in the individual health insurance market,” Walker wrote in his letter introducing the bill to the Legislature.
