A. 
This chapter establishes the retiree medical funding program for police officers and firefighters (the program). The purpose of the program is to provide those retirees receiving retirement benefits under the police and fire retirement system and who qualify as members of the program with a health reimbursement arrangement (HRA) to cover the eligible medical expenses of the members, their spouses and eligible dependents. Members may participate in the then current active municipal health insurance plan, subject to the terms and conditions of that plan.
B. 
Contributions to the program by the Municipality of Anchorage: The municipality's responsibilities under this funding program are limited to the following: the initial pre-funding contribution and the monthly contributions to the funding program under section 3.87.060A, and the annual payment to the Trust of an amount equivalent to the salary and benefits of a Non-Rep 15 level municipal employee to serve as staff administrator to the Board of Trustees as provided in section 3.87.030D. Additionally, the municipality will allow members to participate in the then current active municipal health insurance plan subject to the terms and conditions of the insurance contract. In the event of termination of the funding program by the assembly, the municipality will be responsible for expenses incurred in accomplishing such termination from an administrative perspective. The municipality has no other obligations to the funding program.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 2003-141, § 1, 10-21-2003; AO No. 2005-153, § 1, 11-8-2005; AO No. 2015-29, § 3, 4-14-2015; AO No. 2019-96, § 1, 8-6-2019)
The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
"Active insurance premium"
means the composite dollar amount established at the beginning of the policy year by the insurance carrier which is required to provide the agreed upon coverage to employees, members and their eligible dependents.
"Active municipal health insurance plan"
means, with respect to a particular member at any point in time, the health insurance plan, including any applicable audio, visual and dental coverage, provided by the municipality to active employees and retirees.
"APDEA"
means the municipal police department employees association or any successor bargaining unit authorized to represent employees in the police services bargaining unit.
"Appointment to retirement"
occurs on the date on which the member has requested and the police and fire retirement board has approved and actually commenced the payment of early, normal, deferred vested or permanent disability benefits from the police and fire retirement system. In any case, an individual who has requested retirement with a requested effective date prior to January 1, 1995 shall not be considered to be appointed to retirement on or after January 1, 1995.
"Board of trustees"
means the eight-person board appointed pursuant to section 3.87.030B of this chapter to administer the program.
"Children"
means natural or adopted sons or daughters only.
"Dependent"
means the dependent of a member as such term is defined in section 152 of the United States Internal Revenue Code.
"Eligible employee benefit coverage"
means coverage under any employee welfare benefit plan designated by the board of trustees as eligible employee benefit coverage.
"Eligible health coverage"
means health coverage described in section 3.87.060D of this chapter.
"Gentile class"
means those individuals certified as class members under John M. Gentile, et al. v. MOA Superior Ct. 3 AN-92-9377 Cl.
"Health reimbursement account"
means the bookkeeping account that contributions are credited to on behalf of the member.
"Health reimbursement arrangement (HRA)"
means the flexible spending arrangement governed by Internal Revenue Code pursuant to Internal Revenue Code section 106, and governed by the terms of this chapter.
"High deductible health plan"
is the qualifying high deductible health plan and has the meaning assigned by Section 223, Internal Revenue Code of 1986.
"IAFF"
means the International Association of Firefighters, Local 1264 or any successor bargaining unit authorized to represent employees in the fire services bargaining unit.
"Line-of-duty death"
means that a police officer or firefighter is killed while performing the assigned duties of a police officer or firefighter with the municipality.
"Member"
means those individuals who qualify as members of the program under section 3.87.040 of this chapter.
"Nonrepresented active command officers and command position"
mean individuals or positions in the municipal police department or fire department assigned supervisory or executive level responsibilities and which are not eligible for collective bargaining under Chapter 3.70.
"Police and fire retirement system"
means the Anchorage Retirement System for Police Officers and Firefighters established in Chapter 3.85 of this Code.
"Post-gentile members"
means those individuals who retired under the police and fire retirement system following certification of the Gentile class and prior to January 1, 1995.
"Premium account"
means a member's health reimbursement account as described in section 3.87.060 of this chapter.
"Presumed disability"
has the meaning defined in AS 23.30, as to certain diseases known to occur with greater frequency among firefighters than among the general public.
"Program"
means the retiree medical funding program for police officers and firefighters established under sections 3.87.010—3.87.060 of this chapter.
"Spouse"
means the lawful spouse of a member. An unmarried domestic partner shall not be considered a spouse.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 96-158(S), § 1, 12-17-1996; AO No. 97-104, § 1, 8-19-1997; AO No. 2003-141, § 1, 10-21-2003; AO No. 2008-100(S), § 1, 1-10-2010; AO No. 2019-96, § 2, 8-6-2019)
A retiree medical funding program trust is established by Trust Agreement entered into as of November 13, 1995 to administer the police and fire retiree medical funding program, and all amounts held by the trust are to be used to administer and fulfill the obligations arising under the retiree medical funding program. The responsibilities and operation of the trust are as follows:
A. 
Administration. The trust shall be administered by an eight-person board of trustees.
B. 
Board of trustees.
1. 
The board of trustees shall administer the trust in accordance with the Trust Agreement entered into as of November 13, 1995.
2. 
Three of the trustees shall be appointed by the APDEA, and three by the IAFF, Local 1264. The trustees appointed by the APDEA and the IAFF shall be either program members or potential members and shall be determined only by the vote of the members and potential members of the funding program. Two nonvoting trustees shall be appointed by the mayor. Assembly confirmation is required of all appointees. All appointments of member trustees shall be for three-year terms except that the initial terms of the member trustees shall be set at one-year, two-year and three-year terms. The nonvoting trustees appointed by the mayor shall serve at the pleasure of the mayor, subject to assembly confirmation. There shall be no limitation to the number of terms to which a trustee may be appointed.
3. 
The board of trustees shall meet at least quarterly and shall adopt regular rules of order and rules of procedure governing its meetings and hearings for the administration of this program.
4. 
Trustees shall serve without compensation from the trust for the performance of trust duties.
C. 
Powers and duties of the board of trustees. The board of trustees shall maintain and administer the police and fire retiree medical funding program set forth in this chapter and shall be the final authority in all matters pertaining to the program. The board of trustees shall have the following powers and responsibilities:
1. 
The responsibility to appoint a trustee pursuant to a trust agreement to manage and operate a trust fund and to receive, hold, invest and reinvest contributions received from the municipality, together with interest and other income, and to pay benefits provided under the program. The board of trustees shall determine the form and terms of the trust agreement and may modify or terminate such agreement from time to time and may remove any trustee and select a successor trustee. The board of trustees may request that the retirement board established under section 3.85.040 for the police and fire retirement system amend its trustee and investment management contracts to provide that the system's trustee and investment manager, invest and operate the program trust funds.
2. 
The authority to engage the services of one or more investment managers and direct the trustee to apportion the trust funds among them for investment purposes.
3. 
The duty to credit contributions to a health reimbursement account for each eligible member.
4. 
The duty to allocate trust earnings, losses and expenses and forfeitures arising under section 3.87.060 among the members' accounts, in such a manner as the board of trustees shall deem appropriate, including a non-pro rata allocation.
5. 
The duty to maintain and administer the HRA for the members, including the maintenance of HRA accounts and the processing, substantiation, and payment of all eligible covered expenses and premium payments.
6. 
The duty to pay or reimburse members for medical expenses eligible for reimbursement under Section 213 of the Internal Revenue Code and the Program.
7. 
The authority to design and solicit benefit plans for members, including selection of the pricing structure. The decision to offer or not to offer these additional benefit plans would be at the sole discretion of the board of trustees. The board of trustees shall be responsible for ensuring that any coverages offered qualify for tax-favored treatment and do not jeopardize the nontaxable benefits offered by the medical funding program. The premium charged for participation in trust-offered programs would be determined by the board of trustees and/or the insurance company underwriting the coverage.
8. 
The authority to refuse to offer or to cease to offer a benefit plan should the board of trustees determine that the coverage or benefits under such plan constitutes taxable income to the recipient.
9. 
The authority to report payments made that are determined by the trust to be taxable income to the recipient of payments.
10. 
The authority to engage the services of qualified professionals (including third party administrators and legal counsel) to assist in the administration and operation of the trust, and the trust program, including the HRA accounts. All expenses of such services shall be borne by the trust program assets.
11. 
The authority to pay any costs reasonably incurred in connection with the administration of the program in accordance with this chapter.
12. 
The authority to determine staffing and scheduling of personnel based on the needs of the trust program.
13. 
All powers available to a trust under AS 13.36.010 et seq. and the trust agreement entitled the Municipality of Anchorage Retiree Medical Funding Program Trust for Police Officers and Firefighters.
D. 
Program administration. The board of trustees shall maintain and administer the police and fire retiree medical funding program set forth in this chapter and shall be the final authority in all matters pertaining to the program. The board of trustees shall have the following responsibilities:
1. 
Staff. The board may select, compensate and retain trust program staff to handle such executive and administrative functions that are required by the board in executing duties under the trust agreement.
a. 
The municipality's contribution to program staff is limited to an annual payment to the Trust of an amount equivalent to the salary and benefits of a Non-Rep level 15 municipal employee.
b. 
The board shall determine the working title and compensation of the trust program staff, provided that compensation and costs in excess of the municipality's contribution shall be borne by the trust program assets.
c. 
The board shall enter into an agreement with the municipality to provide for full payroll and employee benefit services for the trust program staff. The trust program staff administrator shall be considered an exempt executive employee of the municipality, at a range to be determined by the board of trustees in consultation with the employment and classification division.
2. 
Budget. The board shall annually submit the trust program annual budget and prior year's expenditures to the assembly and the administration by assembly information memorandum.
3. 
Ethics Code: The Board of Trustees and staff shall follow the provisions of AMC Chapter 1.15, unless more restrictive fiduciary duties apply.
4. 
The board of trustees shall follow municipal code provisions except where the board adopts procurement and other provisions in current code applicable to the police and fire retirement system under AMC Chapter 3.85 for comparable board of trustee administration. Additional provisions may be provided for by ordinance adopted by the assembly.
5. 
Fiduciary liability insurance. The provisions of Title 7 notwithstanding, the board shall have the authority to acquire policies of insurance at the expense of the trust assets for fiduciary liability, independent of municipal risk management insurance services.
E. 
Federal tax treatment. The income of the trust is intended to be exempt from taxation under section 115(1) of the United States Internal Revenue Code.
F. 
Termination. The trust shall terminate after payment of all members has been made. After payment of any final administrative expenses of the trust has been made, any amounts remaining in the trust shall revert to the municipality to be used for any lawful purpose.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 95-183, 9-12-1995; AO No. 2001-106, § 1, 6-5-2001; AO No. 2003-141, § 1, 10-21-2003; AO No. 2015-29, § 4, 4-14-2015)
A. 
Eligibility.
1. 
An individual who retires under the police and fire retirement system with a normal, early or permanent disability retirement benefit and who is included in at least one of the categories set forth in this section shall become a member of the program on the first day of the month following appointment to retirement. Appointment to retirement may be retroactive.
2. 
An individual who terminates employment covered by the police and fire retirement system with a deferred vested benefit and who is included in at least one of the categories set forth in this section shall become a member in the program on the first day of the month following appointment to retirement.
B. 
Membership criteria.
1. 
Represented individuals who are members of the police and fire retirement system and who are appointed to retirement on or after January 1, 1995.
2. 
Members of the police and fire retirement system who are appointed to a nonrepresented command officer position on or after January 1, 1995.
3. 
Nonrepresented active command officers who are eligible for retiree medical coverage under AO No. 77-257, and command officers who retired prior to January 1, 1995, and are receiving retiree medical coverage under AO No. 77-257, who make an irrevocable election to participate in the program. Such election may be made at any time, shall be made in the manner specified by the municipality, and shall be effective as of the first day of the month following the date that such election is submitted to the municipality.
4. 
The municipality, in its sole discretion, may allow Gentile class members, post-Gentile members or deferred vested members who separated from service prior to January 1, 1995, to, by irrevocable election, become eligible members of the police and fire retiree medical funding program. Such election shall be effective as of the first day of the month next following the date of such election.
C. 
Loss of eligibility. If an individual who is a member because he or she is receiving a disability retirement benefit ceases to receive the disability retirement benefit because the police and fire department board determines that such individual is no longer eligible to receive the benefit, such individual shall cease to be a member with the month in which such disability retirement benefits cease to be paid. The individual may requalify as a member if and when normal, early or disability retirement benefits subsequently commence for such individual.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 97-104, § 2, 8-19-1997; AO No. 2003-141, § 1, 10-21-2003)
A. 
Within 31 days of appointment to retirement, a member may elect to continue participation in the active municipal health insurance plan. If a member elects to continue participation at such time, proof of insurability shall not be required. The required active insurance premium for such coverage must be paid from the member's HRA account as a qualified payment. To the extent that the amount credited to the member's premium account is not sufficient to pay the full required active insurance premium, the member shall be required to contribute the balance of the required active insurance premium to the active municipal health insurance plan. This may be by voluntarily electing to take the payment from the member's retirement benefit from the police and fire retirement system, or other forms of payment deemed acceptable by the Municipality of Anchorage, including but not limited to the authorized deduction from the member's spouse that is also a member of the program.
1. 
The Municipality shall provide a monthly discount from the stated premium to all members purchasing municipal health insurance. This monthly discount will be equal to the high deductible health plan monthly premium minus the monthly Class 1 contribution.
a. 
Members who purchase municipal health insurance are not restricted to the high deductible health plan. The member may elect another eligible health plan and still receive the benefit of the monthly discount.
2. 
Disability.
a. 
In the event that a member's permanent occupational disability benefits are awarded retroactively, the member shall have 31 days from the date of the police and fire retirement board's decision to grant permanent disability benefits to elect to participate in the active municipal health insurance plan without being subject to proof of insurability. However, such participation will be effective on the first of the month following such election; coverage is not retroactive.
B. 
A member who does not elect to participate in the active municipal health insurance plan at the time of retirement shall be eligible to commence participation at other times in accordance with the following:
1. 
A member may elect to enroll himself or herself, his or her spouse, and his or her dependents after a qualifying event or during a special enrollment period. A special enrollment period is a limited enrollment period that opens when the member loses other coverage for reasons beyond the members control, gains other coverage, or has a qualifying family status change. Special enrollment changes must be submitted within 30 days of the qualifying family status change.
Examples of qualified family status changes that allows for changes during the benefit year include:
•
Marriage or divorce
•
Death of a dependent child or spouse
•
Change in the member or spouse's employment status that results in loss or gain of coverage
•
Birth, adoption, or change in the custody of a child
2. 
Open enrollment periods will be scheduled periodically and a member may elect to enroll himself or herself, his or her spouse, and his or her dependents during such enrollment period. Such enrollment is not subject to the member and his or her spouse and dependents submitting proof of insurability.
3. 
A member and his or her spouse and dependents who enroll in the health insurance plan shall be subject to the terms and conditions of the active municipal health insurance plan.
C. 
If the spouse and dependents of a member are participating in the active municipal health insurance plan upon the death of the member, the surviving spouse and dependents may continue participation in the plan until funds in the member's account are exhausted or until attaining age 65, whichever is later. However, the surviving spouse and dependents are ineligible for the monthly discount described in section 3.87.050A.1.
D. 
If the spouse and dependents of a member are not participating in the active municipal health insurance plan upon the death of the member, the surviving spouse and dependents may enroll in the plan during the annual open enrollment period immediately following the member's date of death, provided that there are funds in the member's account or the surviving spouse has not attained age 65, or the dependents would still qualify as the member's dependents if the member was alive. However, the surviving spouse and dependents are ineligible for the monthly discount described in section 3.87.050A.1. The surviving spouse and dependent shall submit proof of insurability.
E. 
Members may elect to participate in the active municipal health insurance plan. Members shall be required to pay the active insurance premium rate. The active insurance premium rate charged to members will be a rate computed based on all active enrollees in the municipal health insurance plan.
F. 
Should the active insurance premium established by the insurance carrier for the coming year be questioned by APDEA, IAFF or the board of trustees, then the municipality and APDEA or IAFF or the board shall jointly select and utilize the services of a third party consulting firm, qualified to review and determine appropriate insurance premiums, to assist in a review of the established rate. The review conducted by the third party shall be limited to a review of the submission of the parties. Following the report of the independent consulting firm, any unresolved issues shall be submitted to the municipal internal auditor for resolution. Costs incurred in connection with the third party consulting services shall be shared equally by the parties participating in the review.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 97-104, § 4, 8-19-1997; AO No. 2003-141, § 1, 10-21-2003; AO No. 2005-153, § 2, 11-8-2005; AO No. 2008-100(S), § 2, 1-10-2010; AO No. 2019-96, § 3, 8-6-2019)
A. 
Contributions by the municipality.
1. 
The Municipality of Anchorage shall make a monthly contribution for the benefit of each member beginning with the first month in which the member becomes a member as described in section 3.87.040 of this chapter. Contributions shall end with the month in which the member dies. In the case of a member who is receiving a permanent disability retirement benefit under the police and fire retirement system, monthly contributions shall end with the earlier of the month in which the member dies or the month in which such disability retirement benefit ceases to be paid because the individual has been determined by the police and fire retirement board as no longer eligible to receive disability benefits. If and when such individual again qualifies as a member under section 3.98.040 of this chapter, monthly contributions will again commence under this subsection.
2. 
The initial monthly contribution for the benefit of a member shall be $490.00. The municipality's monthly contribution for a member shall be adjusted each January 1, beginning with January 1, 1996, depending on the member's retirement age or service at appointment to retirement, whichever results in the greater annual adjustment, as provided in subsection A.4. of this section.
3. 
For individuals who become members after January 1, 1995, the monthly contributions for the first year of membership in the program shall be determined as follows:
a. 
For a member who retires with a normal, early or disability retirement, the monthly contribution for the first year of membership shall be equal to:
i. 
The monthly contribution that would have applied had the member retired on January 1, 1995, plus
ii. 
The applicable annual adjustment factors for the period beginning on January 1, 1995, and ending the first day of the calendar year in which the individual becomes a member.
b. 
For a member who terminates employment with a deferred vested retirement benefit, the monthly contribution in the first year of membership shall be equal to the monthly contribution that was in effect for an employee with the same age who was appointed to retirement in the year that the deferred vested member separated from municipal service.
4. 
The contribution amount shall be adjusted annually in accordance with the CPI factors described below:
Class
Retirement Age
OR
Service at Retirement
Annual Adjustment
1.
60 or older
 
25 years
75 percent of medical CPI
2.
55—59
 
 
50 percent of medical CPI
3.
50—54
 
20—24 years
50 percent of medical CPI, with a maximum of 6 percent
4.
Less than 50
 
0—19 years
25 percent of medical CPI, with a maximum of 3 percent
"Medical CPI" means the annual percentage change in the medical components of the national consumer price index-W as measured by the index released for the end of the third calendar quarter by the Bureau of Labor Statistics.
The annual adjustment formula described above shall not be changed. Except as described in section 3.87.070, at no time shall the monthly contribution for the benefit of a member be less than the monthly contribution that was or would have been in effect with respect to the member on January 1, 1995.
5. 
The municipality shall make an initial prefunding contribution to the trust of $2,000,000.00.
6. 
If upon reaching the age of Medicare eligibility, a member is not eligible to participate in Medicare without paying the Medicare Part A Premium, the municipal contribution to the trust on behalf of that member will be increased by an amount equal to 50 percent of the Medicare Part A Premium that the member is required to pay for part A coverage, upon submission of proof of enrollment in Medicare.
B. 
HRA account. A bookkeeping account shall be established for each member of the program. Each member's account shall be credited with the following amounts:
1. 
The contribution by the municipality for the benefit of the member;
2. 
A share of investment gains and losses of the trust described in section 3.87.030 of this chapter in such amounts as the board of trustees shall determine;
3. 
A share of forfeitures arising under section 3.87.060G of this chapter in such amounts as the board of trustees shall determine;
4. 
A share of the expenses incurred by the board of trustees in the administration of the trust in such amounts as the board of trustees shall determine;
5. 
A share of any prefunded contributions to the trust made by the municipality in such amounts as the board of trustees shall determine; and
6. 
COBRA premiums.
A member's account shall be reduced by amounts used to pay for eligible medical expenses.
C. 
Contributions, income, gains and assets to be held in trust. All contributions by the municipality, all income and gains on such contributions, and all other income, gains, and other assets funding the program shall be held in trust as described in section 3.87.030.
D. 
Eligible medical expense. The term "eligible medical expenses" means those medical expenses eligible under section 213 of the Internal Revenue Code, but only to the extent that such coverage is eligible for the exclusion from income under section 106 of the United States Internal Revenue Code and benefits and reimbursements provided under such coverage are excludable from income under section 105(c) of the United States Internal Revenue Code. Expenses are not eligible unless they are incurred by the member, the member's spouse, and/or the member's dependents, as defined under section 152 of the United States Internal Revenue Code. Notwithstanding the preceding, expenses are not eligible to the extent that the member or member's spouse or dependents is/are not eligible for such coverage on account of the terms and conditions of such coverage and/or the entity providing such coverage. To the extent that the various conditions of this subsection are satisfied, eligible expenses shall include, but shall not be limited to, the following:
1. 
The cost of coverage in the active municipal police or fire health insurance plan. Enrollment in such plan shall be subject to the restrictions in section 3.87.050 of this chapter.
2. 
The cost of coverage under a health plan available on the open market, including for example a Medicare supplemental plan.
3. 
The cost of coverage under a health plan available to the member through another employer.
4. 
The cost of coverage under a health plan available to the member's spouse or dependents through such spouse's or dependents' employer(s).
5. 
The cost of coverage under Medicare Part A and B.
6. 
The cost of coverage under any other health plan that the board of trustees may decide to make available under the program.
7. 
The cost of COBRA coverage for qualified beneficiaries.
8. 
The cost of long-term care premiums.
E. 
Qualified reimbursements.
1. 
Reimbursements to the member (or surviving spouse or dependents) may be made only upon submission to the administrator of information adequate to substantiate that the member (or surviving spouse or dependent) has actually incurred and/or paid for expense, including a premium payment or contribution for the eligible coverage.
2. 
The amounts paid for eligible medical expenses shall be deducted from the member's account.
3. 
If a member ceases to receive a disability retirement benefit under the police and fire retirement system because the member is considered no longer eligible, such member will continue to be treated as a member solely for purposes of requesting qualified payments to the extent that amounts remain credited under the premium account.
4. 
If a member dies while amounts remain credited under the member's premium account, the member's surviving spouse may request that qualified payments be made on his or her behalf to the extent that amounts remain credited under the premium account. However, the surviving spouse shall cease to be eligible to request qualified payments at such time as the surviving spouse is no longer eligible to receive benefits under the police and fire retirement system.
5. 
If the member dies without a surviving spouse or if both the member and the surviving spouse die while amounts remain credited under the member's premium account, the member's eligible surviving dependents may request that qualified payments be made on his or her/their behalf to the extent that amounts remain credited under the premium account. However, surviving dependents shall cease to be eligible to request qualified payments at such time as the surviving dependents are no longer eligible to receive benefits under the police and fire retirement system.
6. 
In the event that a member's permanent disability benefits are awarded retroactively, and the member enrolled in eligible health coverage (including municipal COBRA coverage) following separation from municipal employment, the member may claim reimbursement for any past premium payments from the funding program.
F. 
Eligible employee benefit coverage. The term "eligible employee benefit coverage" shall mean coverage under any employee benefit plan, other than a health plan, that the board of trustees may, in its sole discretion, elect to treat as eligible employee benefit coverage under the program. However, in no case may the board of trustees cause coverage under any employee benefit plan to be treated as eligible employee benefit coverage unless such coverage and any reimbursements and benefits provided under such coverage are excludable from income under the United States Internal Revenue Code. An example of employee benefit coverage that the board of trustees may elect to treat as eligible employee benefit coverage is coverage and benefits under a group term life insurance plan that are excludable from income under sections 79 and 101 of the United States Internal Revenue Code.
G. 
Forfeitures and account adjustments.
1. 
Upon a member's death without a surviving spouse or surviving dependents, the member's HRA account balance shall be forfeited to the trust. If, after a member's death, the member's surviving spouse and/or surviving dependents are eligible to request qualified payments under the program, any amounts remaining in the member's HRA account when neither the surviving spouse nor any surviving dependent remains eligible to request qualified payments, whether by death or otherwise, shall be forfeited to the trust.
2. 
The aggregate of all amounts forfeited shall, at the discretion of the board of trustees, either be used to pay the administrative expenses of the trust or be applied to pay for benefits.
H. 
Special rule for members disabled in the line of duty.
1. 
Any person meeting the definition of totally and permanently disabled as defined herein may irrevocably elect to a member of this program or may elect to be covered under subsections H.2 through H.4 of this section.
2. 
If the qualified member elects to be covered under subsections H.2 through H.4 of this section, the monthly contributions described in subsection C of this section shall not be made for the benefit of a member who is totally and permanently disabled during the performance of his or her duties with the municipality. An employee of the municipality who is determined to be totally and permanently disabled by the state worker's compensation board shall presumptively be considered to have been totally and permanently disabled in the performance of his or her duties.
3. 
In lieu of making monthly contributions described in subsection C of this section on behalf of members disabled in the line of duty, the municipality shall continue coverage for such members in the active municipal health insurance plan and be responsible for paying the full premium cost for the member and the member's spouse and dependents.
4. 
The municipality shall make the first premium payment for the month following appointment to retirement under the police and fire retirement system and ending with the month in which the member dies or the month in which the member is determined by the state worker's compensation board to be no longer totally and permanently disabled. If the member is receiving or becomes eligible for a normal, early or disability retirement benefit, he or she may requalify as a member in accordance with the rules of subsection A of this section. Should the member die with a surviving spouse and/or dependents, the municipality shall continue to make health plan premium payments on their behalf as long as they are eligible to receive a benefit from the police and fire retirement system.
5. 
Members retired due to permanent occupational disability or reclassed as permanent occupational disability, as defined in chapter 3.85, shall be entitled to Class 1 benefits to remediate the diminution of benefits a member would have been entitled to if the member had continued in service until normal retirement age.
I. 
Special rule for the spouse and dependents of a member suffering a line-of-duty death.
1. 
In the event of a member's line-of-duty death, the municipality shall continue to provide the member's spouse with coverage in such member's active municipal health insurance plan and shall pay the full cost of the health plan premium for the member's spouse and the member's eligible dependent children. The municipality shall make the first premium payment for the month following the member's line-of-duty death and shall continue to make premium payments as long as the spouse is eligible to receive a benefit from the police and fire retirement system.
2. 
In the event of a member's line-of-duty death, the municipality shall continue to provide the member's eligible dependent children with coverage in such member's active municipal health insurance plan and shall pay the full premium cost for those eligible dependent children. The municipality shall make the first premium payment for the month following the member's line-of-duty death and shall continue to make premium payments as long as such dependent children are eligible to receive a benefit from the police and fire retirement system.
J. 
Eligible expense reimbursements. The health reimbursement arrangement shall reimburse members (and, as applicable, surviving spouses and dependents) for medical expenses eligible under Section 213 of the Internal Revenue Code, including eligible long-term care premiums, only if such expenses are not reimbursed under any other health plan. The program will not reimburse an expense incurred before the date the HRA is in existence, nor reimburse an expense that is incurred before the date an employee first becomes enrolled in the HRA. The maximum dollar amount reimbursable shall not exceed the balance in the member's account.
K. 
Maximum amount of reimbursement available. A member may be reimbursed for medical expenses incurred while the member was enrolled in the HRA account up to the balance currently credited to the member's account.
L. 
Carry forward. Any remaining amounts in the HRA account at the end of the plan year shall be carried forward to subsequent plan years.
M. 
Death of the member. Subject to the provisions of section 3.87.060E.4, upon the death of a member, no further contributions to the HRA shall be made. Medical expenses incurred by the member's surviving spouse and dependents after the date of death of the member are eligible for reimbursement to the extent funds remain in the member's HRA account unless COBRA coverage is elected. If COBRA coverage is elected, the qualified beneficiary will be billed for the applicable maximum including the administrative fee for the subsequent period of COBRA coverage.
N. 
Federal tax treatment. Coverage under the HRA is intended to qualify as health coverage that is excludable from income under section 106 of the United States Internal Revenue Code and expense reimbursements under the plan are intended to qualify as excludable from income under section 105(b) of the United States Internal Revenue Code. If a member's expense reimbursements are determined not to qualify for tax exemptions, and if a change in the United States Internal Revenue Code should cause expense reimbursements to cease to be excludable from income under section 106 or 105(b) of the United States Internal Revenue Code, the board of trustees may terminate the Program or the plan or treat such reimbursements as taxable income to the member.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 96-158(S), § 2, 1-1-1996; AO No. 97-104, § 3, 8-19-1997; AO No. 2003-141, § 1, 10-21-2003; AO No. 2005-153, § 3, 11-8-2005; AO No. 2008-100(S), § 3, 1-10-2010; AO No. 2019-96, § 4, 8-6-2019)
A. 
Assembly review.
1. 
Every five years from January 1, 1995, the assembly will review the operation of the program including the amount of the initial monthly contribution established in Section 3.87.060 to be made by the municipality.
B. 
Internal audit review.
1. 
The Internal Auditor will perform an audit of the trust at least once every three years. The scope of the audit may include, but is not limited to, evaluating trust administrative costs, and reviewing enrollment and payment records for members purchasing health insurance through the Municipality.
2. 
The results of the biennial internal audit procedures shall be submitted to the Board of Trustees and Municipal Assembly.
C. 
The municipal assembly may amend or terminate the police and fire retiree medical funding program. The administrative expenses for termination of the funding program shall be the responsibility of the municipality. The termination or amendment of the program shall not terminate the obligation of the municipality to contribute at the same level of contribution set forth in section 3.87.060A.3 and A.4 to a successor funding arrangement. The provisions of this chapter shall be subject to Article XII, Section 7 of the Alaska State Constitution.
(AO No. 94-222(S-1), § 1, 12-28-1994; AO No. 2003-141, § 1, 10-21-2003; AO No. 2008-100(S), § 4, 1-10-2010; AO No. 2019-96, § 5, 8-6-2019)