(a) The local education insurance committee shall establish a health benefit, as the local education insurance committee deems necessary and reasonable, for retired local education employees. The health benefit may be made available to retired employees who are drawing retirement benefits either through the consolidated retirement system or through a non-TCRS retirement program sponsored by a participating local education agency.

(b) The local education insurance committee is authorized to establish the eligibility criteria for retired teachers and the administrative requirements for the collection of premiums.

(c)

(1) The local education insurance committee is authorized to establish a schedule of premiums or a schedule of defined contributions subject to funding by the general assembly for retirees eligible for the health benefits established under this part. The schedule of defined contributions shall be graduated to reflect the retiree's length of service. Retirees with thirty (30) or more years of service will receive forty-five percent (45%) of the scheduled premium or defined contribution. Retirees with twenty (20) years of service, but less than thirty (30) years of service, will receive thirty-five percent (35%) of the scheduled premium or defined contribution. Retirees having less than twenty (20) years of service will receive twenty-five percent (25%) of the scheduled premium or defined contribution.

(2) “Years of service,” as used in this subsection (c), means only those years of service rendered by the retiree as a teacher, as defined in § 8-34-101, or as a state employee, as defined in § 8-27-204(a)(1), and upon which the retiree's monthly retirement allowance is based.

(3) To the extent that premiums are assessed and retirees pay less than the total monthly premium, and to the extent that the benefit payments exceed the anticipated premium for eligible retirees who were not retired during the prior calendar year, that expense shall be reimbursed by the state through a direct appropriation to the local education group insurance plan.

(d) Any retired local education employee who is participating in the health benefit authorized by this section and who is in receipt of a disability retirement allowance pursuant to chapter 36, part 5 of this title, shall not be required to discontinue coverage in the basic health plan authorized by § 8-27-302(a)(1) upon eligibility for Part A of Medicare and may continue in the plan as a retired employee to the point at which Medicare eligibility would have been attained had the disability not occurred; provided, that the retired employee remains eligible for the disability retirement allowance and that Part B of Medicare is retained. The insurance premium shall be the same as that charged to nondisability retirees who are not yet eligible for Medicare. Any retired local education teacher who is granted a service retirement under chapter 36 of this title shall also qualify for a continuation of insurance coverage if the teacher meets the conditions set forth in this subsection (d) and the eligibility criteria established by the local education insurance committee.

(e) The retiree coverage authorized under this section shall not be available to any retiree whose employment with a participating agency commenced on or after July 1, 2015. Any retiree whose first employment with a participating agency commenced before July 1, 2015, and who returns to service with a participating agency after that date shall not be prohibited from retiree coverage under this section; provided, that the retiree did not accept a lump sum payment from the Tennessee consolidated retirement system before July 1, 2015. Any retiree whose first employment with the state of Tennessee commenced before July 1, 2015, and who initiates service with a participating local education agency after that date shall not be prohibited from retiree coverage under this section; provided, that the retiree did not accept a lump sum payment from the Tennessee consolidated retirement system before July 1, 2015.

(f)

(1) The commissioner of finance and administration, the chair of the finance, ways and means committee of the senate, the chair of the finance, ways and means committee of the house of representatives, and the chair of the consolidated retirement board shall serve as trustees of any defined contribution plan or related investment vehicle established as a health benefit by the local education insurance committee under this section. The trustees shall have the authority to implement any such defined contribution plan or related investment vehicle. Notwithstanding § 8-27-103(a), such authority shall include, but not be limited to, administering any contract related to such defined contribution plan or related investment vehicle, procuring services necessary or desirable for efficient administration of the investment vehicles used for the health benefit and overseeing the investment policy for any investment vehicles used.

(2) The trustees shall delegate the duty to conduct the day-to-day responsibilities for managing the investment vehicles to the state treasurer.

(3) The costs associated with administering any such defined contribution plan or related investment vehicle shall be assessed to the funds generated by any such defined contribution plan or related investment vehicle and, if necessary, to the employee benefits trust.

(4) This subsection (f) shall be effective September 1, 2015.