When used in this article, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) EMPLOYEE. Any person covered by the Public Education Employees' Health Insurance Plan pursuant to Section 16-25A-11 or person who is employed full-time in any public institution of education within the State of Alabama which provides instruction at any combination of grades K through 14, exclusively, under the auspices of the State Board of Education or the Alabama Institute for Deaf and Blind; provided, any person employed part-time by any public institution of education within the State of Alabama which provides instruction at any combination of grades K through 14, exclusively, under the auspices of the State Board of Education or the Alabama Institute for Deaf and Blind, shall be included in the definition of employee if such person shall agree to have deducted from his or her compensation a pro rata portion of the premium cost of a full-time employee, based on the percentage of time such person is employed, in accordance with such rules and regulations as shall be adopted by the board.

(2) RETIRED EMPLOYEE. Any person receiving a monthly benefit from the Teachers' Retirement System who at the time of his or her retirement was employed by a public institution of education within the State of Alabama which provided instruction at any combination of grades K through 14, exclusively, under the auspices of the State Board of Education or pursuant to Section 16-25A-11. Any person receiving a monthly benefit from the Teachers' Retirement System who at the time of his or her retirement was employed by a state-supported postsecondary institution and any person receiving a monthly benefit from the Employees' Retirement System whose retirement under the Employees' Retirement System was from a local board of education or a state-supported postsecondary institution who participated pursuant to Section 36-27-6.

(3) BOARD. The Public Education Employees' Health Insurance Board.

(4) CLASS. An employee or retiree shall be included in one of the following classes: (i) active employee single, (ii) active employee family, (iii) non-Medicare retiree single, (iv) non-Medicare retiree family, (v) Medicare retiree single, (vi) Medicare retiree family, (vii) non-Medicare retiree with Medicare eligible dependent(s), or (viii) Medicare retiree with non-Medicare dependent(s).

(5) EMPLOYEE CONTRIBUTION. The amount of the total health insurance premium to be paid by the employee or retiree as determined by the board.

(6) EMPLOYER CONTRIBUTION. The amount of the total health insurance premium to be paid by the employer as determined by the board.

(7) FEDERAL POVERTY LEVEL. Income level determined in Section 673(2) of the Community Services Block Grant Act 2 (42 U.S.C. § 9902(2)). Should the federal government no longer derive or substantially change its derivation of the federal poverty level, the Public Education Employees' Health Insurance Board has the authority to derive and apply an alternate poverty level to carry out its obligations under this article.

(8) HEALTH INSURANCE PREMIUM. The total health insurance cost under a health insurance plan with respect to each class of employees or retirees. Individual premiums may include adjustments and surcharges for (i) family size including, but not limited to, a husband and wife both being covered by a health insurance plan as defined herein, (ii) spouse's eligibility for other health insurance, (iii) smokers and users of tobacco products, (iv) preventive care and wellness care participation, and (v) any such other categories of risk that the board shall approve.

(9) MEDICARE RETIREE. A retiree entitled to benefits under the federal Medicare program (Subchapter XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.)).

(10) NON-MEDICARE RETIREE. A retiree not entitled to benefits under the federal Medicare program (Subchapter XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.)).

(11) OPTIONAL COVERAGE. Health insurance coverage offered to employees and retirees for dental, cancer, indemnity, vision, or such other coverage the Public Education Employees' Health Insurance Board deems appropriate in lieu of coverage under the basic medical plan.

(12) OTHER EMPLOYER GROUP HEALTH INSURANCE COVERAGE. Group health insurance coverage available to an employee or retiree through an employer other than the State of Alabama. Other employer group health insurance coverage does not include the State Employees' Health Insurance Plan, the Public Education Employees' Health Insurance Plan, or the local government health insurance plan.

(13) PEEHIP. The Public Education Employees' Health Insurance Plan.

(14) RETIREE. Same as "Retired Employee."

(15) SUPPLEMENTAL COVERAGE. Coverage offered to employees and retirees by the Public Education Employees' Health Insurance Board in lieu of coverage in the basic medical plan of the Public Education Employees' Health Insurance Plan that supplements an employee's or retiree's other employer group health insurance coverage.

(16) SUPPLEMENTAL POLICY. Policy offered to employees and retirees by the Public Education Employees' Health Insurance Board in lieu of or in addition to coverage in the basic medical plan of the Public Education Employees' Health Insurance Plan that provides a defined set of benefits.

(17) YEARS OF SERVICE. The number of years and months of creditable service by an employee prior to retirement as determined by the Teachers' Retirement System or Employees' Retirement System including any periods of full time permanent employment subsequent to retirement up to a maximum of five years.