Be it enacted by the General Assembly of Virginia:

1.  That § 2.2-2818.1 of the Code of Virginia is amended and reenacted as follows:

§ 2.2-2818.1. Supplemental health insurance coverage; state employees eligible for military health insurance coverage.

A. The Department of Human Resource Management may offer a voluntary supplemental health coverage program for state employees under this section.

B. Under the supplemental health coverage program, a state employee who is eligible to participate in the health insurance program pursuant to § 2.2-2818 and who is also eligible for benefits under the TRICARE Military Health System as a military retiree may elect to receive primary coverage under the a TRICARE Military Health System, and receive supplemental health coverage plan offered as an option under the state program state's cafeteria plan established under § 125 of the Internal Revenue Code. An individual participating in the supplemental health coverage program does not receive primary coverage through the group benefits program, but receives supplemental health coverage under this section Dependents eligible to participate in the state health insurance program who are also TRICARE eligible may also be covered under the TRICARE supplemental health plan.

C. The cost of supplemental health coverage provided under this section shall be paid in the same manner that the cost of basic coverage is paid under § 2.2-2818 full by the member on a pre-tax basis subject to the rules and regulations of § 125 of the Internal Revenue Code.

D. The Department of Human Resource Management may not implement a supplemental health coverage program under this section if the Department finds that the program would not be cost-effective or would otherwise not be advantageous to the state or program participants.

E. Notwithstanding any other provision of this section, if the Department of Human Resource Management establishes a supplemental health coverage program, the amount of the contribution made for an individual who elects to receive supplemental health coverage under the program may be reduced, as provided in the general appropriations act, to reflect the reduced cost of the supplemental health coverage.