Proposals Begin To Take Shape

JULY 18, 2012: The Special Commission on Retiree Healthcare met for more than two hours Wednesday morning in an effort to develop a list of potential reform measures to place before an actuary for cost analysis.

While much work remains to be done leading up to the Commission’s November 30th report date, a general consensus seems to have emerged among the 11-member Commission that current retirees and survivors be held harmless or grandfathered under existing law. Senator Jack Hart (D-South Boston) set this tone at the Commission’s June meeting, following a presentation by the Association that detailed current retiree income and healthcare costs.

Serving as the appointee of Senate President Therese Murray (D-Plymouth), Hart made it clear that any reform proposal must be mindful not to harm retirees living on fixed incomes. Other Commissioners, including representatives of Governor Deval Patrick, quickly endorsed his sentiment.

“Andrew Powell (AFL-CIO Representative) and I have made it clear from the start that any attempt to alter eligibility or lower benefits for current retirees was not something we would consider at all. It was entirely ‘off the table’ for us,” explains Association Legislative Liaison Shawn Duhamel, the Commission’s Retiree Representative. “Between Bill Rehrey’s excellent presentation in June and Senator Hart’s comments, a majority of Commissioners seem to feel the same way.”

Future Retirees & Survivors

What is being considered are reforms that would impact future retirees, such as prorating insurance contributions based on years of service, increasing the minimum years of service needed to qualify for retiree insurance benefits and establishing a minimum age of eligibility for retiree healthcare that might vary from pension eligibility.

More controversial measures include the creation of artificial inflation barriers, which would shift the risk of future healthcare cost increases away from the government and onto future retirees.

The Association won a major concession when the Commission agreed to include a study of survivor insurance benefits within the actuary’s report. Specifically, the actuary will look at various means to uniformly provide survivor’s health insurance benefits across each municipality. Association and labor representatives have routinely voiced concerns that more than a handful of municipalities provide no contribution toward survivor coverage.

Senator Michael Knapick (R-Westfield) agreed that providing for uniform survivor benefits was something the state had been considering for some time and agreed with Duhamel’s motion to pose the question to the actuary. House Public Service Chairman John Scibak (D-South Hadley) and Commission Chairman Henry Dormitzer both echoed Knapik’s remarks in support of closely examining the issue.

“We have long sought a way to address the great inequity that exists in some communities where survivors are treated as second class citizens. Now might provide the best opportunity we’ve had to fix what we see as a great injustice,” said Bill Rehrey. “Some might argue that providing such benefits is no longer seen as being a ‘best practice’ in the private sector. But, as we’re pointed out, what type of values do we want to promote as a Commonwealth?”

The Commission is expected to meet again in September, at which time a full actuarial report will be delivered.

Please see the upcoming September 2012 edition of the Voice for a full account of the Commission's activity.