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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
cancer insurance; public safety; retirees
(NOW: cancer insurance retirees; public safety)
Purpose
Allows, effective January 1, 2026, a person who did not receive covered Cancer Insurance Program (CIP) benefits to elect to continue CIP coverage after retirement by paying the CIP premium. Prescribes requirements for the Public Safety Personnel Retirement System (PSPRS) Board of Trustees when determining the cost of the CIP premium for persons who elected to continue coverage. Extends, permanently, the requirement for the state and political subdivisions to offer a supplement benefit plan for public safety employees who have a duty-related injury.
Background
PSPRS provides a uniform, consistent and equitable statewide retirement program to public safety personnel who are regularly assigned to hazardous duty of the type expected of peace officers and fire fighters. The PSPRS Board of Trustees (PSPRS Board) administers the CIP for participating employers. The CIP is a welfare benefit plan intended to pay expenses incurred in the treatment of cancer. By July 31 each year, the PSPRS Board must notify employers of the amount payable for the costs of the CIP and the amount charged to each employer may not exceed $180 per employee. An eligible participant must have cancer that was first diagnosed after the person's date of membership in PSPRS, the Corrections Officer Retirement Plan or the PSPRS Defined Contribution Plan.
On retirement, persons who were either receiving CIP benefits before retirement or who are diagnosed with cancer subsequent to retirement remain eligible for CIP coverage for the total of five months per year of service plus actual time spent in the Deferred Retirement Option Plan. A person whose eligibility to receive CIP benefits is expiring may continue to remain eligible for CIP coverage if the person makes an election with the PSPRS Board and pays the premium to the PSPRS Board (A.R.S. §§ 38-642; 38-643; and 38-644).
Laws 2012, Chapter 287 established the requirement for state and political subdivisions that employ public safety employees on a full-time basis to establish a plan for employees who are injured while on duty and cannot perform functions of their position. The public safety employee must be receiving workers' compensation benefits to be eligible for the supplemental plan. Plans must be designed so that, while receiving the plan benefits, the public safety employee receives approximately the identical base salary received prior to the injury less the amount of taxes the employee was paying. The requirement for public safety employers to offer the supplemental plan to its employees terminates on October 1, 2025 (A.R.S. § 38-961 and Laws 2017, Ch. 113).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
CIP
Coverage
(Effective January 1, 2026)
1. Allows a person who did not receive covered CIP benefits to elect to continue CIP coverage after retirement by paying the cost of the premium as determined by the PSPRS Board.
2. Allows, by January 1, 2027, a person who was eligible for the CIP and who did not receive covered benefits after retirement to elect to continue CIP coverage, as prescribed.
3. Requires the PSPRS Board, when determining the cost of the CIP premium, to determine the cost to CIP for persons who elect to continue coverage, except for persons who were either receiving CIP benefits before retirement or who are diagnosed with cancer subsequent to retirement, and to set an actuarily determined premium to cover the costs.
4. Prohibits the PSPRS Board, when determining the cost of the CIP premium, from considering the balance of, contributions to or investment earnings associated with the CIP Account that are not associated with persons who elect to continue CIP coverage and pay the PSPRS Board-determined CIP premium.
5. Requires, for a person who elects to continue CIP coverage, the annual premium payment to be deducted from the person's pension payment at the beginning of the plan year and allows the person to elect to discontinue CIP coverage within 180 days after the payment is made and request a refund of the premium.
6. Deems a person who elects to discontinue CIP coverage as no longer eligible for CIP coverage.
7. Requires the PSPRS Administrator to work with the PSPRS Advisory Committee and PSPRS's actuary to make recommendations to the PSPRS Board regarding updates to the CIP plan documents to comply with the outlined requirements.
8. Specifies that the premium payment for persons who were either receiving CIP benefits before retirement or who are diagnosed with cancer subsequent to retirement is equal to the amount paid by the PSPRS employer for each employee.
Public
Safety Employer Supplement Plan for Duty-Related Injuries
(Effective on the general effective date)
9. Eliminates the October 1, 2025, repeal of the requirement for the state and political subdivisions to offer a supplement benefit plan for public safety employees who have a duty-related injury.
Miscellaneous
10. Makes technical and conforming changes.
11. Becomes effective on the general effective date, with a delayed effective date as noted.
Amendments Adopted by Committee
1. Prohibits the PSPRS Board, when determining the cost of the CIP premium, from considering any monies associated with the CIP Account that are not associated with persons who elect to continue CIP coverage and who pay the PSPRS Board-determined CIP premium.
2. Allows a person who did not receive covered CIP benefits to elect to continue CIP coverage after retirement by paying the cost of the PSPRS Board-determined premium.
3. Requires, for a person who elects to continue CIP coverage, the annual premium payment to be deducted from the person's pension payment at the beginning of the plan year and allows the person to elect to discontinue CIP coverage within 180 days after the payment is made and request a refund of the premium.
4. Specifies that a person who elects to discontinue CIP coverage is no longer eligible for CIP coverage.
5. Allows, by January 1, 2027, a person who was eligible for the CIP and who did not receive covered benefits after retirement to elect to continue CIP coverage, as prescribed.
6. Requires the PSPRS Administrator to work with the PSPRS Advisory Committee and PSPRS's actuary to make recommendations to the PSPRS Board regarding updates to the CIP plan documents to comply with the outlined requirements.
7. Makes technical and conforming changes.
Amendments Adopted by Additional Committee of the Whole
1. Extends, permanently, the requirement for the state and political subdivisions to offer a supplement benefit plan for public safety employees who have a duty-related injury.
2. Makes technical changes.
House Action Senate Action
PSLE 2/20/25 DPA/SE 12-0-0-3 FIN 3/24/25 DPA 6-1-0
3rd Read 3/4/25 56-2-2
Prepared by Senate Research
May 6, 2025
MG/ci