A. The legislature finds and declares that public employees face a severe problem in securing continuing medical insurance when they retire. Medical care inflation has far exceeded the general inflation rate for the past decade. It is expected that at least some of the factors that have contributed to this phenomenon will continue into the foreseeable future. As the public employee population grows older, the ratio of retirees to active employees is expected to continue to rise. This factor will be exacerbated as the life expectancy of the aged improves and the post-world war two generation approaches retirement age. Financial problems faced by the federal medicare system are becoming more serious, and it is apparent that there will be attempts to shift those costs to the public employer and employee. More such cost shifting is likely, and one of the purposes of the Retiree Health Care Act is, within the constraints of what can be afforded by the taxpayers, to alleviate this burden on the retiree as much as possible.

B. The legislature further finds and declares that the public employees covered by the Retiree Health Care Act have entered into public employment in circumstances where they have received in exchange for their services a present salary and an expectation of receiving a future stream of benefits, including payment of certain retirement benefits. The legislature declares that the expectation of receiving future benefits may be modified from year to year in order to respond to changing financial exigencies, but that such modification must be reasonably calculated to result in the least possible detriment to the expectation and to be consistent with any employer-employee relationship established to meet that expectation. The legislature does not intend for the Retiree Health Care Act to create trust relationships among the participating employees, retirees, employers and the authority administering the Retiree Health Care Act nor does the legislature intend to create contract rights which may not be modified or extinguished in the future; rather the legislature intends to create, through the Retiree Health Care Act, a means for maximizing health care services returned to the participants for their participation under the Retiree Health Care Act.

C. The legislature further finds and declares that nothing in the Retiree Health Care Act shall prohibit the legislature from increasing or decreasing participating employer and employee contributions, eligible retiree premiums or group health insurance coverages or plans, and that participation in the Retiree Health Care Act by retired and active public employees shall not be construed to establish rights between the retired and active public employees and the state for health care benefits which cannot be modified or extinguished in the future to meet changes in economic or social conditions.

D. The legislature further finds and declares that the health care coverage provided under the Retiree Health Care Act shall constitute a state group health insurance plan, separate subsequent state group health insurance plan, state group insurance plan, separate subsequent state group insurance plan, state medical group insurance plan and separate subsequent state medical group insurance plan for the purposes of Sections 10-11-121, 10-12-15, 10-12A-11 and 22-11-41 NMSA 1978.

E. The legislature further finds and declares that participation of current retirees in the Retiree Health Care Act is predicated on State ex rel. Hudgins v. Public Employees Retirement Board 58 N.M. 543, 273 P.2d 543 [743] (1954); the additional monthly participation fee to be paid by current retirees as a condition of participation in the Retiree Health Care Act is in lieu of the lump-sum consideration paid by the retirees who were the relators in that case.

History: Laws 1990, ch. 6, § 3.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Compiler's notes. — Sections 10-12-15 and 10-12A-11 NMSA 1978, referred to in Subsection D, were repealed by Laws 1992, ch. 111, § 23 and Laws 1992, ch. 118, § 20, respectively. For present comparable provisions, see 10-12B-16 and 10-12C-15 NMSA 1978, respectively.

Section 22-11-41 NMSA 1978, referred to in Subsection D, was repealed in 1993.