(1) In lieu of remuneration for unused sick leave at retirement, a college board (or the state board for community and technical colleges for employees under its jurisdiction) may provide with equivalent funds a medical expense plan for eligible employees.

(2) A medical expense plan provided under this section shall require, as a condition of participation, that each covered eligible employee sign an agreement to hold the employer harmless if the employee or employer is later found to be indebted to the United States as a result of:

(a) The employee not paying income taxes on amounts contributed to the plan; or

(b) The employer not withholding or deducting a tax, assessment, or other payment on funds contributed to the plan as required by federal law.

Such agreement shall also include a provision requiring each covered eligible employee to forfeit remuneration for accrued sick leave at retirement if he/she is covered by a medical expense plan and the employee refuses to sign the required agreement.

(3) In providing a medical expense plan authorized under this section, a college board or the state board may only provide such plan covering all employees in one or more of the groups defined in WAC 131-16-067.

(4) In providing a medical expense plan for a group of eligible employees whose conditions of employment are governed by chapter 28B.52 or 41.56 RCW, a college board may only provide such plan by agreement applicable to all of the members of a bargaining unit.

(5) A medical expense plan established under this section shall be applicable to all retirements of covered eligible employees within a calendar year. Such a medical expense plan may be discontinued in any future year, but once discontinued it may not be reinstated for the same group of eligible employees within the same calendar year as it was discontinued.