§ 24-52.5-101 — Legislative declaration

Colorado § 24-52.5-101

• Jurisdiction: Colorado
• Title 24: Government
• Art.: Retirement Health Savings Trust

Text

(1) The general assembly hereby finds
and declares that:

(a) It is essential for the state to be able to attract and retain qualified
employees in order to provide the highest quality of service to the people of
Colorado.

(b) The quality and flexibility of health and retirement benefits are important
factors in hiring and retaining qualified state employees.

(c) The cost of medical care rises every year and because medicare and state
retiree health benefits do not fully cover those costs, retirees are increasingly
responsible for covering their medical costs after retirement.

(d) A properly constructed program to help state employees prepare for the
costs of medical expenses after retirement could be cash funded through
contributions of state employees and could operate as an enterprise as defined in
section 20 of article X of the state constitution.

(2) The general assembly further finds and declares that:

(a) A new concept for providing retirement health benefits for the employees
of nonprofit entities, including state governments, is for the nonprofit entity to
create a retirement health savings trust. Such trust offers the following
advantages:

(I) A retirement health savings trust is established by the nonprofit entity for
the purpose of providing retirement health benefits to the employees of the entity.

(II) The provision of retirement health benefits is considered an integral part
of the nonprofit entity's activities.

(III) A retirement health savings trust that makes the provision of retirement
health benefits possible is considered a part of the nonprofit entity and therefore
may be included in the entity's tax-exempt status.

(IV) A retirement health savings trust creates an individual account within
the trust for each employee who chooses to participate and allows the employer to
make pretax contributions, including unused annual or sick leave, to an employee's
account on behalf of the employee.

(V) The nonprofit entity that creates a retirement health savings trust
maintains substantial control of the trust in that it has the power to amend or
terminate the trust and to appoint the trustees of the trust.

(VI) A retirement health savings trust allows each participating employee to
determine how his or her money will be invested.

(VII) All earnings in a retirement health savings trust grow on a tax-deferred
basis, and a participating employee may make withdrawals on a tax-free basis after
reaching a certain age, so long as the moneys are used for qualified medical
expenses.

(VIII) Any assets that remain in a participating employee's account at the
time of the employee's death may be used for qualified medical expenses by the
employee's spouse, dependents, or other beneficiaries.

(b) The creation of a retirement health savings trust by the state for the
benefit of state employees would give such employees an opportunity to prepare
for health costs that they will incur during retirement and would be beneficial to the
health and well-being of such employees.

Legislative History

Source: L. 2004: Entire article added, p. 869, � 1, effective August 4.