Teachers and Municipal Retirees Protected
July 2014 Voice: Retired teachers and municipal employees will receive a two-year reprieve from increased health insurance contribution percentage rates due to a provision contained within the FY15 state budget. The law extends the same protection to municipal retirees that has been long afforded to state retirees.
Teachers and Municipal Retirees Protected
July 2014 Voice: Retired teachers and municipal employees will receive a two-year reprieve from increased health insurance contribution percentage rates due to a provision contained within the FY15 state budget. The law extends the same protection to municipal retirees that has been long afforded to state retirees.
Promoted by our Association and unanimously endorsed by the legislature, the language extends the retiree insurance moratorium through July 1, 2016. Originally passed within Chapter 69, Acts of 2011, the moratorium was scheduled to expire this year – on July 1, 2014!
The moratorium legally prohibits municipalities, which adopt the municipal insurance reforms contained within Chapter 69, from increasing contribution percentage rates for a fixed period of time.
In the House, Speaker Robert DeLeo and Ways and Means Chairman Brian Dempsey quickly endorsed the Association’s proposal by placing the extension directly in the Ways and Means budget proposal approved in April.
When the Senate debated their budget in May, the extension was added through a floor amendment. Led by Senators Ken Donnelly and Jason Lewis, the amendment was unanimously adopted during the first day of debate. Senators Michael Moore, Eldridge, Keenan, DiDomenico, Jehlen, McGee and Chandler also cosponsored the amendment.
The newly elected Lewis chairs the Joint Committee on Public Service, which is the key committee where all public retiree legislation originates.
Representing the Town of Winchester, Chairman Lewis has also found himself at ground zero of the debate over retiree health insurance benefits (see article page 9). To his credit, Lewis has helped encourage town officials to work with local Winchester retirees, who have been seeking a compromise solution to local insurance changes.
“The quick resolution and unanimous support given to retirees on this issue has been incredible. Local retirees cannot be placed in harm’s way while long term solutions to healthcare costs are sorted out,” says Association Legislative Liaison Shawn Duhamel.”
More Time Needed
Association officials argued that the moratorium extension was justified in order to offer more time for municipal, state and national insurance reforms to take effect.
Back in 2011, during the development of Chapter 69, the Association fought for and won the inclusion of the original three-year moratorium. At that time, legislative leaders and Governor Deval Patrick agreed that proper time was needed to allow the various insurance and healthcare reforms to work.
Chapter 69 allows municipalities options by which to reduce local insurance costs: Make local plan design changes or join the state’s Group Insurance Commission (GIC). However, in order to adopt the provisions of Chapter 69, municipalities must convene a local Public Employee Committee (PEC), with whom they negotiate health insurance changes. Our Association then has the responsibility of appointing a local member to represent retirees on the PEC.
Since the reforms brought about by Chapter 69 often result in higher copayments and deductibles, the legislature wisely agreed to the premium percentage moratorium. Also a factor, Chapter 69 was the second such municipal insurance reform in as many years.
Further, in 2011, the legislature was in the midst of crafting the 2nd phase of Massachusetts healthcare reform – cost containment. Passed into law as Chapter 224, Acts of 2012, the law has already begun to stabilize healthcare and insurance costs within the state.
And finally, the long-term impact of the federal Affordable Care Act (aka “Obamacare”) is yet to be known. However, private healthcare experts maintain that the impact of both the ACA and Massachusetts Cost Containment Law is likely to result in lowering the future cost of retiree health insurance.
“Given that cities and towns already have the ability to shift costs onto retirees or force entrance into the GIC (another major cost savings for many) it does not make sense to allow additional increases in monthly insurance premium percentages,” further commented Duhamel. “Taking the time to see if the reforms already on the books are working, as well as for the legislature to fully address a long-term solution to retiree healthcare, is critical.”
Rising to address his amendment during the debate on the Senate floor, Senator Ken Donnelly said it best. “Cost shifting has already occurred with retirees paying higher out-of-pocket costs. We have some local retirees now paying 30-40% of their pension income toward health insurance costs. Protecting these vulnerable retirees is the morally responsible thing to do.”