(a) (1) In this section the following words have the meanings indicated.

(2) “Creditable service” means:

(i) service credited toward a retirement allowance under Division II of this article;

(ii) service while a member of the Judges’ Retirement System under Title 27 of this article;

(iii) service while an employee was employed by the Domestic Relations Division of the Anne Arundel County Circuit Court, prior to transfer on or before July 1, 2002 into the State Personnel Management System, in accordance with § 2-510 of the Courts Article; or

(iv) service while a member of the Maryland Transit Administration Retirement Plan under § 7-206 of the Transportation Article.

(3) (i) “Retiree” means:

1. a former State employee who receives a retirement allowance under Division II of this article;

2. a former employee of the Medical System Corporation, as defined in § 13-301 or § 13-401 of the Education Article, who receives a retirement allowance from the Employees’ Retirement System of the State of Maryland or the Employees’ Pension System of the State of Maryland under Title 22 or Title 23 of this article; or

3. a former employee of the Maryland Transit Administration who receives a Maryland Transit Administration retirement allowance under § 7-206 of the Transportation Article.

(ii) “Retiree” does not include:

1. a member of the faculty or staff of a community college;

2. a teacher or a staff member employed by a county board of education; or

3. an individual who retired under an optional program under Title 30 of this article.

(4) “State service” means service with the State by:

(i) an employee while a member of the Employees’ Retirement System or the Employees’ Pension System under Title 22 or Title 23 of this article;

(ii) a member of the Judges’ Retirement System under Title 27 of this article;

(iii) a teacher while a member of the Teachers’ Retirement System or Teachers’ Pension System under Title 22 or Title 23 of this article;

(iv) a correctional officer, while a member of the Correctional Officers’ Retirement System under Title 25 of this article;

(v) an employee of the Medical System Corporation, as defined in § 13-301 or § 13-401 of the Education Article, while a member of the Employees’ Retirement System of the State of Maryland or the Employees’ Pension System of the State of Maryland under Title 22 or Title 23 of this article;

(vi) a State Police officer while a member of the State Police Retirement System under Title 24 of this article;

(vii) a law enforcement officer while a member of the Law Enforcement Officers’ Pension System under Title 26 of this article; or

(viii) an employee while a member of the Maryland Transit Administration Plan under § 7-206 of the Transportation Article.

(b) (1) This subsection applies to a retiree who:

(i) began State service on or before June 30, 2011; or

(ii) 1. began State service on or after July 1, 2011; and

2. is a retiree of the Judges’ Retirement System.

(2) A retiree may enroll and participate in the health insurance benefit options established under the Program if the retiree:

(i) ended State service with at least 10 years of creditable service and within 5 years before the age at which a vested retirement allowance normally would begin;

(ii) ended State service with at least 16 years of creditable service;

(iii) ended State service on or before June 30, 1984;

(iv) retired directly from State service with a State retirement allowance on or after July 1, 1984, and had at least 5 years of creditable service;

(v) retired directly from State service with a State disability retirement allowance on or after July 1, 1984; or

(vi) retired directly from State service in the Judges’ Retirement System at the mandatory retirement age required by Article IV, § 3 of the Maryland Constitution with less than 5 years of creditable service.

(3) (i) The surviving spouse or dependent child of a deceased retiree who was eligible to enroll may enroll and participate in the health insurance benefit options established under the Program as long as the spouse or child is receiving a periodic allowance under Division II of this article or the Maryland Transit Administration Retirement Plan under § 7-206 of the Transportation Article.

(ii) Subparagraph (i) of this paragraph does not apply to a deceased retiree’s spouse or dependent child who receives an Option 1, Option 4, or Option 7 benefit under Division II of this article or a lump-sum payment of benefits under the Maryland Transit Administration Retirement Plan under § 7-206 of the Transportation Article.

(4) (i) If a retiree receives a State disability retirement allowance or has 16 or more years of creditable service, the retiree or the retiree’s surviving spouse or dependent child is entitled to the same State subsidy allowed a State employee.

(ii) In all other cases, if a retiree has at least 5 years of creditable service, the retiree or the retiree’s surviving spouse or dependent child is entitled to 1/16 of the State subsidy allowed a State employee for each year of the retiree’s creditable service up to 16 years.

(iii) Notwithstanding subparagraph (ii) of this paragraph and subsection (a)(4)(i) of this section, if a retiree is an additional employee or agent of the State Racing Commission, for the purposes of determining a retiree’s State subsidy, creditable service shall be determined with respect to service as an additional employee or agent beginning from the initial date of employment or January 1, 1986, whichever is later.

(iv) 1. This paragraph applies only to a retiree of the Judges’ Retirement System who retired directly from State service at the mandatory retirement age required by Article IV, § 3 of the Maryland Constitution with less than 5 years of creditable service.

2. Notwithstanding subparagraph (ii) of this paragraph, a retiree of the Judges’ Retirement System or the retiree’s surviving spouse or dependent child is entitled to 1/16 of the State subsidy allowed a State employee for each year of the retiree’s creditable service.

(c) (1) (i) Except as provided in subparagraph (ii) of this paragraph, this subsection applies to a retiree who begins State service on or after July 1, 2011.

(ii) This subsection does not apply to:

1. a retiree of the Judges’ Retirement System; or

2. a former Governor of Maryland who began serving as Governor on or after January 21, 2015.

(2) A retiree may enroll and participate in the health insurance benefit options established under the Program if the retiree:

(i) ends State service with at least 25 years of creditable service;

(ii) ends State service with at least 10 years of creditable service within 5 years before the age at which a vested retirement allowance normally would begin;

(iii) retires directly from State service with a State retirement allowance and has 10 years of creditable service; or

(iv) retires directly from State service with a State disability retirement allowance.

(3) (i) The surviving spouse or dependent child of a deceased retiree who was eligible to enroll may enroll and participate in the health insurance benefit options established under the Program as long as the spouse or child is receiving a periodic allowance under Division II of this article or the Maryland Transit Administration Retirement Plan under § 7-206 of the Transportation Article.

(ii) Subparagraph (i) of this paragraph does not apply to a deceased retiree’s spouse or dependent child who receives an Option 1, Option 4, or Option 7 benefit under Division II of this article or a lump-sum payment of benefits under the Maryland Transit Administration Retirement Plan under § 7-206 of the Transportation Article.

(4) (i) If a retiree receives a State disability retirement allowance or has 25 or more years of creditable service, the retiree or the retiree’s surviving spouse or dependent child is entitled to the same State subsidy allowed a State employee.

(ii) In all other cases, if a retiree has at least 10 years of creditable service, the retiree or the retiree’s surviving spouse or dependent child is entitled to 1/25 of the State subsidy allowed a State employee for each year of the retiree’s creditable service up to 25 years.

(iii) Notwithstanding subparagraph (ii) of this paragraph and subsection (a)(4)(i) of this section, if a retiree is an additional employee or agent of the State Racing Commission, for the purposes of determining a retiree’s State subsidy, creditable service shall be determined with respect to service as an additional employee or agent beginning from the initial date of employment.

(d) (1) Notwithstanding subsections (b) and (c) of this section and §§ 2-509 and 2-509.1 of this subtitle, the State may establish separate health insurance benefit options for retirees that differ from those for active State employees.

(2) Subject to § 2-509.1 of this subtitle, on or after July 1, 2011, the health insurance benefit option for retirees shall include a prescription drug benefit that:

(i) has the same co-payments, coinsurance, and deductible that apply to the prescription drug benefit for active State employees;

(ii) requires:

1. retirees who qualify for the maximum State subsidy to pay 25% of the premium for the prescription drug benefit; and

2. retirees who qualify for a partial State subsidy to pay 25% of the premium for the prescription drug benefit plus the proportional additional amount required under subsections (b)(4)(ii) and (c)(4)(ii) of this section; and

(iii) requires retirees to pay out-of-pocket limits equal to:

1. $1,500 for the retiree only; and

2. $2,000 for the retiree and the retiree’s family.