Section 10C. The commission shall negotiate with and purchase on such terms as it deems to be in the best interest of the commonwealth, certain political subdivisions that have been approved by the commission for inclusion under this section, and the active and retired employees and their dependents insured or eligible to be insured under this chapter, including the surviving spouse of said employees who are eligible for coverage under the federal health insurance for the aged act, from one or more insurance companies or nonprofit hospital, medical, or other service corporations, a policy or policies of group general or blanket insurance providing hospital, surgical, medical, dental and other health insurance, to be known as optional medicare extension. Said policy or policies shall consist of one or more schedules of benefits which, as determined by the commission, may be related to the schedule of benefits purchased by the commonwealth under the provisions of section four, or the schedule of benefits purchased by counties, cities, towns and districts under the provisions of sections three and five of chapter thirty-two B. Such schedule of benefits may include on behalf of any person insured under this section the payment of any premium which may be required by the federal health insurance for the aged act, to be paid by any enrollee thereof. The claim experience of persons insured for optional medicare extension may, as determined by the commission, be maintained apart from, or made a part of, the claim experience applicable to the schedules of benefits provided under section four of this chapter, or sections three and five of chapter thirty-two B. The commission shall execute all agreements or contracts pertaining to said policy or policies or any amendment thereto, for and on behalf and in the name of the commonwealth, for such period not exceeding five years, as it may deem the most advantageous to the commonwealth; provided, however, that the portion of the cost of the premium to be borne by the commonwealth shall not exceed the estimated monthly cost for which funds have been appropriated by the general court for the then current fiscal year.

Every policy whether original or renewal shall, in the case of all persons insured under this section who immediately prior to the effective date of such original or new policy were covered by group insurance benefits under this chapter or under chapter thirty-two B, provide protection by continuing uninterrupted coverage without regard to waiting periods for benefits.

(a) Each person or his dependent to which this section applies shall furnish the commission, in such form as it shall prescribe, such information as is necessary to be insured for optional medicare extension, and shall authorize the withholding of the appropriate premium from salary, wages, compensation, pension, annuity or retirement allowance by the appropriate governmental agency or public authority. Each person may also authorize the withholding of any premium which may be required by the federal health insurance for the aged act, to be paid by any enrollee thereof, or may make direct payment to the commission as it may determine, and the commission shall transmit all such amounts to the appropriate federal agency on behalf of such enrollee in a manner prescribed by said agency.

(b) With respect to any period of insurance authorized by this section which is in effect for an active employee or a retired employee and his dependent, payment for such insurance shall be made as provided in section eight.

(c) With respect to any period of insurance authorized by this section which is in effect for an active employee or an active employee and his dependent of a county, city, town or district, notwithstanding any general or special law to the contrary, there shall be withheld from each monthly payment of salary, wages or other compensation by the appropriate public authority or the duly authorized representative thereof fifty per cent of the premium for such insurance and the commonwealth shall make primary payment of the remaining fifty per cent of said premium subject to reimbursement as authorized in paragraph (f).

(d) With respect to any period of insurance authorized by this section which is in effect for a retired employee or a retired employee and his dependent of a county, city, town or district notwithstanding the provisions of section nineteen of chapter thirty-two or any other general or special law to the contrary, there shall be withheld from each monthly payment of pension, annuity or retirement allowance, by the respective retirement system or by the appropriate retiring authority, fifty per cent of the premium for such insurance, and the commonwealth shall make primary payment of the remaining fifty per cent of said premium subject to reimbursement as provided in paragraph (f).

(e) All amounts withheld from the salary, wages or other compensation of an active employee of a county, city, town or district shall be forwarded at least as often as monthly by the responsible governmental official to the commission in a manner prescribed by it and all amounts withheld from the pension, annuity or retirement allowance of a retiree of a county, city, town or district shall be forwarded at least as often as monthly by the responsible governmental official of the teachers' retirement system, and of the retirement system established in a county, city, town or district as well as under any noncontributory pension or annuity to the commission in a manner prescribed by it.

(f) The commission shall determine at least annually, or sooner, the amount of premiums which shall be reimbursed to the commonwealth by agencies thereof, by housing and redevelopment authorities and counties, cities, towns and districts having persons insured under this section. The commission shall also determine, at least annually, the portion of the commission's expense of administering this optional medicare extension program for such persons applicable to the agency, authority or political subdivision where they are employed or from which they have retired. After such determinations, the commission shall certify the amounts determined as aforesaid to the state treasurer for assessment. The state treasurer shall issue a warrant in the manner provided by section twenty of chapter fifty-nine requiring the counties, cities, towns and districts concerned to pay into the treasury of the commonwealth the amounts of such premium and administrative expenses attributable to such political subdivisions. The aforementioned manner of payment shall not prevent the commission, when deemed necessary, to require a political subdivision from making payment directly to the state treasurer.

(g) Upon the death of an active or retired employee insured under this section, the surviving spouse may continue the insurance under this section, or the group hospital, surgical, medical, dental and other health insurance benefits provided under section five, whichever may be applicable, and the duration of such insurance, the determination and the amount of premium to be paid will be in accordance with section eleven.

(h) Any dividend or refund, accepted by the commission from the carrier as a result of the contract negotiated under this section, shall be deposited by the commission with the state treasurer as provided in section nine. The commission shall determine the amount of dividend or refund apportionable to the various counties, cities, towns and districts having persons insured hereunder, and shall notify the state treasurer to reduce the premium charges and administrative expenses attributable to the applicable political subdivision by the amount of refund so applicable. If no premium is payable by a political subdivision for the succeeding year, the commission shall certify same to the state treasurer who shall pay over the amount of such refund to the political subdivision entitled thereto.

(i) The commission may issue rules and regulations implementing the provisions of this section and such rules and regulations shall not be subject to the provisions of chapter thirty A.