The local unit participants in the Employees* Retirement System under Section 36-27-6 are authorized to extend to the retirees, designated beneficiaries, and surviving spouses of active employees of the local units who are receiving benefits from the retirement system health insurance coverage in the insurance plan which covers those employees of the local units. The costs of extending the health insurance plan to the retirees, designated beneficiaries, and surviving spouses may be paid from any funds available to the local units boards which are otherwise unencumbered.

As an alternative to the provisions of Section 36-34-1, the local units are authorized to participate in a health insurance plan developed by the State Employees* Insurance Board or the Alabama Retired State Employees* Association to provide health insurance coverage to retirees, designated beneficiaries, and surviving spouses of active members of the local units who are receiving benefits from the Employees* Retirement System. The costs of extending the health insurance to the retirees, designated beneficiaries, or surviving spouses under the aforementioned developed health insurance plan may be paid from any funds available to the local units which are otherwise unencumbered.