(a) The state insurance committee, in cooperation with the local education insurance committee and local government insurance committee, shall provide supplemental medical insurance as the state insurance committee deems necessary and reasonable for retired state employees and teachers who are covered by Medicare benefits. The state insurance committee may also establish provisions for participation in Medicare health maintenance organizations certified by the centers for Medicare and Medicaid services for retired state employees and may establish optional coverages as the state insurance committee deems necessary and reasonable.

(b) If, pursuant to any contract for insurance coverage authorized by this section, the provider or administrator returns or refunds any amounts by which premiums or fees exceed expenses, the amounts shall be used only for the supplemental medical insurance program for retirees, and in no instance shall the returns or refunds be used to reduce the amount of state funding that would otherwise be required under subsection (c).

(c)

(1) From appropriations made in the general appropriations act each year for that purpose, the state insurance committee is authorized to pay an amount on behalf of each participating retiree toward the cost of supplemental medical insurance provided pursuant to this part.

(2) “Retiree,” as used in this part, means any former state employee, higher education employee, or teacher receiving a monthly retirement allowance from the Tennessee consolidated retirement system, or the optional retirement system established in § 8-25-202.

(d)

(1) The state insurance committee shall, within the appropriations available, establish a contribution level for participating retirees with thirty (30) or more years of service. For participating retirees with twenty (20) years of service, but less than thirty (30) years of service, the state insurance committee shall make a contribution on behalf of participating retirees at not more than seventy-five percent (75%) of the contribution made for participating retirees with thirty (30) or more years of service. For participating retirees with fifteen (15) years of service, but less than twenty (20) years of service, the state insurance committee shall make a contribution on behalf of those retirees at not more than fifty percent (50%) of the contribution made for participating retirees with thirty (30) or more years of service. Retirees with less than fifteen (15) years of service may participate in such supplemental medical insurance as may be provided pursuant to this part, but the state insurance committee shall make no contribution on such retirees' behalf.

(2) “Years of service,” as used in this section, means only those years of service rendered by the retiree as a state employee, higher education employee, or teacher and upon which the retiree's monthly retirement allowance is based.

(e) The supplemental medical insurance authorized under this section shall not be available to any person otherwise qualified under subsection (a) whose initial employment with the state or other qualifying employer commenced on or after July 1, 2015. The rights of election, transfer, and enrollment conferred by this section shall not be available to any person whose initial employment with the state or other governmental agency qualifying the person for plan membership commenced on or after July 1, 2015.