This bill amends the School Employees Health Benefits Program (SEHBP) to modify the reimbursement structure for certain premium charges under the federal Medicare program, specifically for Parts B and D. It establishes that the program will reimburse qualified retirees for their Medicare premiums, but will no longer cover the income-related monthly adjustment amounts (IRMAA) that are surcharges applied to beneficiaries based on their income. The bill specifies that reimbursements for Medicare premiums will not include these surcharges for any qualified retiree, regardless of their retirement date, starting from January 1, 2025.

Additionally, the bill clarifies that the State will continue to cover the costs of premium charges for qualified retirees and their dependents under the SEHBP. It also outlines that employees who become members of the Teachers' Pension and Annuity Fund after the effective date of P.L.2010, c.2 will contribute 1.5% of their monthly retirement allowance towards health benefits coverage, with the State covering the remaining costs. The Governor's Fiscal Year 2026 budget anticipates that this change will generate an additional $35 million in revenue.

Statutes affected:
Introduced: 52:14-17.32