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SB 139

Restore State Emp/Teacher Retiree Med Benefit.

2025-2026 Session Introduced by Val Applewhite and 5 co-sponsors

SB 139 restores retiree medical benefits for public employees and teachers first earning service after 1/1/2021, returning eligibility and funding to offset costs.

Passed 1st Reading
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Bill Summary · SB 139

SB 139 — Restore State Employee/Teacher Retiree Medical Benefit

Status: Introduced Jan 23, 2025 — Passed 1st Reading

Purpose / Intent

SB 139 restores retiree medical benefits that would otherwise be eliminated for persons who first earned service credit on or after January 1, 2021. The bill reverses parts of prior law (S.L. 2017‑57) that removed those post‑employment health benefits for more recent hires, ensuring that affected members remain eligible for retiree medical coverage under the State Health Plan.

Key provisions

  • Repeals subsections (c) and (d) of Section 35.21 of S.L. 2017‑57 — removing the statutory provisions that eliminated retiree medical benefits for members first earning service on or after 1/1/2021.
  • Restores eligibility for retiree medical benefits for affected members of the following systems:
    • Teachers’ and State Employees’ Retirement System (TSERS)
    • Consolidated Judicial Retirement System (CJRS)
    • Legislative Retirement System (LRS)
    • Optional retirement programs (as applicable)
  • Appropriations to address near‑term cost impacts:
    • $500,000 recurring from the General Fund to the Department of State Treasurer for FY 2025–2026
    • $2,000,000 recurring from the General Fund for FY 2026–2027
    • These funds are designated to help cover increased costs to the North Carolina State Health Plan for Teachers and State Employees resulting from continuation of retiree medical members under this act.
  • Effective dates:
    • The repeal of the S.L. 2017‑57 provisions is made retroactive to December 31, 2020.
    • Except as otherwise provided, the act becomes effective July 1, 2025.

Who is affected

  • Current and future state employees and public school teachers who first earned retirement service on or after 1/1/2021 (they would retain or regain eligibility for retiree medical benefits).
  • Retiree health plan administrators (State Health Plan), State Treasurer’s Office, and employers that participate in TSERS/CJRS/LRS/optional programs.
  • State budget — through the State Health Plan’s expenditures and the appropriations above.

Fiscal and policy considerations

  • The bill recognizes an ongoing increase in State Health Plan costs from restored eligibility and provides initial recurring appropriations for the first two fiscal years to partially offset those costs. Full fiscal impact will depend on enrollment, eligibility take‑up, and health care cost trends; additional appropriations or plan adjustments could be required in later years.
  • Retroactive restoration (to 12/31/2020) affects members who would have been covered had the earlier elimination not occurred.

Legislative process / next steps

  • SB 139 has passed its first reading (introduced 1/23/2025). It will proceed through committee review, additional readings, and votes in the General Assembly. Stakeholders (employees, retirees, plan administrators, budget analysts) may testify in committee hearings as the bill advances.

Compiled from official sources — confirm details with the bill’s official record.

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