KentuckyHB 2132026 Regular SessionHouseWALLET

AN ACT relating to reemployment of retired police officers.

Sponsored By: Emily Callaway (Republican)

Signed by Governor

Peace Officers And Law EnforcementPersonnel And EmploymentPolice, City And CountyRetirement And PensionsSheriffsActuarial Analysis

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Bill Overview

Analyzed Economic Effects

12 provisions identified: 3 benefits, 2 costs, 7 mixed.

Tax break and rules for retiree insurance

Premiums for retiree hospital and medical coverage under this law are not subject to the state premium tax. If the system’s insurance fund pays your premium, that payment is not taxable income to you. No commissions may be paid to agents or brokers when this coverage is bought.

Weaker protection for post-2003 retiree benefits

If your membership began on or after July 1, 2003, these retiree health benefits are not protected by the inviolable contract. The General Assembly may suspend or reduce them if it decides the Commonwealth’s welfare requires it.

Annual bumps to retiree health help

Your monthly retiree insurance contribution increases 1.5% every July 1, and it keeps compounding while it is payable. Each January 1, an extra $5 can be added for each new full year of service after you reach the career threshold, but only when the plan is at least 90% funded. The career threshold is 27 years for nonhazardous jobs; hazardous jobs follow the statute’s service rule.

Retiree health coverage and subsidies updated

The system offers group hospital and medical coverage for retirees, spouses, and dependents. For members who started before July 1, 2003, the system pays 25%, 50%, 75%, or 100% of the single premium based on 48, 120, 180, or 240 months of service. For members who started on or after July 1, 2003, you need at least 10 years of service (15 years if you started on or after Sept 1, 2008). Your monthly contribution equals years of service times a per‑year rate: $10 for nonhazardous or $15 for hazardous; after the career threshold, non‑Medicare rates rise to $40 (nonhazardous) or $50 (hazardous), while Medicare‑eligible stay at $10 or $15. Line‑of‑duty death or duty‑related disability waives service minimums and pays full premiums for the member and eligible survivors; spouses and children also get set support in hazardous and General Assembly cases. The board may include non‑Medicare retirees in the Kentucky Employees Health Plan with the same benefits and premium class as state employees. Coverage can continue past 65 if you are not Medicare‑eligible or are under Medicare Secondary Payer rules with qualifying reemployment.

Retiree health paused during full-time work

If your membership began on or after September 1, 2008 and you retire, then return to a regular full‑time job that must join a Kentucky retirement system, you cannot use retiree health coverage while you are working. You must take the health plan your new employer offers during that time.

How retiree health is funded

Employers in the County Employees Retirement System must pay the actuarially set amount needed to fund retiree health contributions. If your membership starts on or after July 1, 2003, your employer must deduct 1% of pay for nonhazardous jobs or 2% for hazardous jobs to fund retiree health accounts. You cannot opt out of these deductions.

Retiree premium reimbursements and payment caps

The board runs a reimbursement plan for retirees who lack the same coverage as Kentucky residents with the same Medicare status, or who get only a partial subsidy. You must file proof of payment; reimbursements are quarterly and cannot exceed the system’s monthly contribution. For nonhazardous retirees, reimbursement is capped at what you paid for single coverage. You may elect coverage through only one Kentucky retirement system; systems split costs by your months of service, and total payments cannot exceed 100%. Systems pay only for actual recipients, and the program does not apply if everyone already has the same coverage. Extra annual increases apply only to certain non‑Medicare contribution items and only if retiree health funding is at least 90%. Premiums can be paid by you, the insurance trust or 401(h) accounts, or transfers from other systems; spouses and dependents can get group rates if paid by payroll deduction or EFT.

Cities can rehire retired officers

Cities can hire retired officers with at least 20 years of service, a proper break in service, no pending charges, and no prearranged return. The job is a one‑year appointment that can be renewed; nonrenewal is not discipline. Rehired officers keep the retirement and retiree health benefits they already had. The city cannot give city health coverage, pay State Health Plan premiums, or pay employer retirement or retiree‑health contributions for these hires. Starting August 1, 2026, the city legislative body may pass a local law to offer health coverage and set the terms.

City limits on rehiring retired officers

Cities face caps on how many retired police they can rehire each year. If last year’s average force was 5 or less, there is no cap. If it was over 5 but under 100, a city may hire the larger of 5 or 25% of that average. If it was 100 or more, a city may hire the larger of 25 or 10% of that average. Retirees hired under KRS 158.4414 do not count against these caps.

County rehiring of retired officers

Counties and sheriffs can rehire retired officers with at least 20 years of service, no pending charges, and a proper break in service. The job is a one‑year appointment that can be renewed; nonrenewal is not discipline. Rehired officers keep the retirement and retiree health benefits they already had. The county, sheriff, or fiscal court cannot give county health coverage, pay State Health Plan premiums, or pay employer retirement or retiree‑health contributions for these hires. Starting August 1, 2026, the county’s chief legislative body may pass a local law to offer health coverage and set the terms.

Public colleges can rehire retired officers

If a public college rehires a retired officer under this law, the retiree keeps all retirement and retiree health benefits they already had. The college cannot give campus health coverage, pay State Health Plan premiums, or pay employer retirement or retiree‑health contributions for these hires. Beginning August 1, 2026, the college’s governing body may choose to offer health coverage and set the terms.

Rules for rehiring campus police retirees

Public colleges can rehire retired police only if strict rules are met. You must have at least 20 years of service, complete the required break in service, have no pending charges, and have made no pre‑retirement deal to return. You must have been in the Law Enforcement Foundation Program, retired as a Chapter 16 commissioned officer, or retired as a postsecondary police officer. Any appointment lasts up to one year, and the school may renew it each year based on need and its pay rules.

Sponsors & Cosponsors

Sponsor

Emily Callaway
Republican • House

Cosponsors

Beverly Chester-Burton
Democrat • House
George Brown Jr.
Democrat • House

Roll Call Votes

All Roll Calls

Yes: 230 • No: 0

House vote • 3/31/2026

passed

Yes: 95 • No: 0

Senate vote • 3/20/2026

3rd reading, passed

Yes: 37 • No: 0

House vote • 2/18/2026