Bill
HB 589
Allows eligible Kentucky retired firefighters to be rehired by local governments for up to one year (renewable), preserving their retirement and health benefits while enabling empl
HB 589 (2026 Regular Session, Kentucky) – Summary
Purpose and intent
- Establishes a program allowing certain retired emergency personnel (specifically firefighters) to be reemployed by certain local government employers after retirement, with tailored rules about eligibility, employment terms, benefits, and financial arrangements.
- Aims to address workforce needs for fire protection while managing retirement benefits, health insurance, and pension funding.
Key provisions and changes
1) New framework for employing retired firefighters (KRS Chapter 65, new section)
- Eligible employers (employers include:
- Cities and local governments and their offices/agencies
- Fire protection districts)
- Eligible employees: firefighters who retired from Kentucky Retirement Systems, County Employees Retirement System, or State Police Retirement System and who meet eligibility criteria.
- Eligibility criteria:
- Participated in Firefighters Foundation Program fund (KRS 95A.200–95A.300) or retired as a firefighter under KRS Chapter 95
- Minimum 20 years of service credit
- Separation from service to maintain retirement effectiveness
- No administrative charges pending; no preexisting return-to-work agreement
- CPAT completed if the individual has not served as a firefighter for 1 year or more prior to reemployment
- Employment terms:
- Term limited to 1 year, renewable annually at employer discretion
- Compensation per standard employer pay scales
- Employment based on need as determined by the employer
- Benefits and health coverage:
- Retiree continues to receive all retirement and health insurance benefits from their original retirement system
- Health insurance through employer generally not provided to retirees (except as allowed by subsection)
- Employers pay normal cost contribution for firefighter in regular full-time positions (per KRS 78.635); no additional retiree-system contributions or retiree health reimbursements beyond those defined
- Employer not required to provide employer-based health insurance to retirees unless the employer’s legislative body authorizes it
- Employment scope and limits:
- One-year term, renewable; subjects to merit/civil service due process as applicable
- Employer caps on the number of retired firefighters employed under this program, with tiered limits:
- No cap for employers averaging ≤5 firefighters in the prior year
- For averages >5 but <100: max 5 retirees OR 25% of the prior-year firefighting staff, whichever is greater
- For averages ≥100: max 25 retirees OR 10% of the prior-year firefighting staff, whichever is greater
2) Reemployment and retirement rules (KRS 61.637; related system rules)
- Reemployment effects on retirement:
- If a retiree is reemployed, retirement payments may be suspended, offset by earnings, and credits may be adjusted per existing suspension/reinstatement rules
- Reinstatement typically ends when reemployment ends; retirement payments resume or are recomputed under the applicable formulas
- Rules include detailed provisions about retroactive payments, potential repayment, and adjustments to service credits and final compensation
- Provisions cover scenarios such as if earnings exceed federal permissible limits, if a prearranged agreement existed, and if the reemployment is with the same employer or a different one
- Special cases for reemployed retirees:
- If ordered reinstatement to a position with pay, the retiree may void retirement and repay benefits to restore status
- Transfer and retirement recomputation rules apply when reemployed in certain scenarios (including disability or disability-related retirement)
3) Health insurance and hospital/medical benefits (KRS 61.702; KRS 78.5536)
- Health plan administration:
- The system’s board must provide a hospital and medical insurance plan for retirees and eligible dependents
- Retirees may pay premiums via payroll deduction or other means; premiums may be shared with funds from the insurance trust or other accounts
- The board may include Medicare-eligible retirees in Medicare-compliant plans; Medicare enrollment rules apply
- Employer contributions and retiree subsidies:
- Employers contribute to the insurance trust fund to support the monthly contribution rate
- Pre- and post-2003 members have different subsidy structures, including percent-based premiums paid by the system on behalf of retirees (100%, 75%, 50%, 25% tiers based on years of service)
- Hazardous vs. nonhazardous service affects premium subsidies
- Additional subsidies or reimbursements may be provided, with conditions tied to funding levels (e.g., 90% funding threshold)
- Reimbursement options:
- For retirees not eligible for Medicare or with certain other eligibility constraints, a medical insurance reimbursement plan may be offered
4) Administrative regulations
- The Kentucky Retirement Systems’ board is authorized to promulgate regulations to implement the act, including forms and procedures for verifying reemployment status and independent contractor/leased employee determinations.
Who is affected
- Eligible employers: Kentucky cities, consolidated/local governments, urban-county governments, charter counties, and fire protection districts
- Retired firefighters who meet the specified eligibility criteria
- The Kentucky Employees Retirement System, County Employees Retirement System, and State Police Retirement System beneficiaries
- Administrative bodies managing retiree health benefits and the Kentucky Employees Health Plan
Timeline and effective dates
- The act outlines eligibility and operational rules but does not specify a single statewide effective date beyond general statutory operation dates (e.g., August 1, 1998 references indicate long-standing transition rules; other provisions reference dates tied to service thresholds and 2003/2008 benefit rules)
- Section 17 includes a prospective framework for retirees reemployed after certain dates (e.g., September 1, 2008) with specific conditions
Notes
- Several sections in the text reference long-standing Kentucky retirement provisions and cross-references to other statutes (KRS chapters 16, 61, 78, 95, 95A, and related sections). The bill combines reemployment rules with retiree health subsidy mechanics.
- The exact dollar amounts and premium subsidies vary by service years, hazardous status, Medicare eligibility, and funding levels, requiring actuarial determinations and board regulations for precise application.
Compiled from official sources — confirm details with the bill’s official record.
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