38. a. Retirees and eligible dependents who participate in the School Employees’ Health Benefits Program shall be eligible to participate in the School Retiree Prescription Drug Plan. The definitions in subsection f. of section 36 of P.L.2007, c.103 (C. 52:14-17.46.6) shall apply to the School Retiree Prescription Drug Plan.

b. There shall be no annual deductible amount that retirees or their eligible dependents shall be required to satisfy before eligibility for payment of prescription drug expenses under the School Retiree Prescription Drug Plan.

c. Eligibility of prescription drug expenses for coverage under the School Retiree Prescription Drug Plan shall be determined on the same basis as reasonable and necessary medical expenses under the School Employees’ Health Benefits Program.

d. A co-payment shall be required for each prescription drug expense until a retiree or eligible dependent satisfies the maximum annual out-of-pocket expense for a calendar year prescribed in subsection f. of this section. The amounts of the co-payments shall be the same as those in effect as of July 1, 2007 for retiree prescription drug coverage under the State Health Benefits Program. The commission shall promulgate rules that shall establish a formula for a reasonable annual escalator to the amount of co-payment.

e. The supply of a drug product eligible for coverage under the School Retiree Prescription Drug Plan for each prescription drug expense shall be limited to 30 days if the prescription is filled at a retail pharmacy, and 90 days if the prescription is filled through the mail-order pharmacy.

f. The amount of out-of-pocket expense that a retiree or eligible dependent shall pay in a calendar year for eligible prescription drug expenses under the School Retiree Prescription Drug Plan shall be limited in the first year of the plan to the amount in effect on July 1, 2007 for retiree prescription drug coverage under the State Health Benefits Program. The commission shall promulgate rules that shall establish a formula for a reasonable annual escalator to the amount of out-of-pocket expense.

g. In the fifth year following the initial appointment of all of its members, the commission shall, as part of the fifth year audit and review undertaken pursuant to section 40 of P.L.2007, c.103 (C. 52:14-17.46.10), review the amounts established in this section and make any changes that it deems appropriate pursuant to section 40 of P.L.2007, c.103 (C. 52:14-17.46.10) by majority vote of the full authorized membership of the commission.

L.2007, c.103, s.38.