Municipal Retiree Insurance Moratorium Expired June 30th

In 2011, Mass Retirees was successful in helping to pass a temporary moratorium that prevented cities and towns from increasing retirees’ health insurance premium contribution percentages. That protection, which has now been extended twice, expires on June 30th.

Association officials, along with the Mass. Teachers Association, PFFM and other public employee unions, have advocated for a permanent change in the municipal health insurance law that would prohibit increases in premium contribution percentages for existing retirees. However, changes could be made to the percentages paid by future retirees.

Attempts to include the proposal as an amendment to the FY19 State Budget fell short in both the House and Senate. Despite the best efforts of key legislators, the amendments were strongly opposed by some local officials and the Mass. Municipal Association (MMA).

As it has done in the past, the MMA mischaracterized the proposal as a budget buster to cities and towns, that would create unreasonable hurdles for local officials trying to control costs.

“The tactics used by the MMA are not new. They fought the original moratorium, as well as opposed each extension over the past seven years,” said Association Legislative Director Shawn Duhamel. “Our proposal does not add one penny to municipal budgets. What it does do is protect existing retirees from further unfair cost shifting. Existing retirees cannot afford to pay more in out-of-pocket costs, along with higher and higher monthly premiums.”

During the budget debate in the Senate, State Senator Cindy Friedman (D-Arlington) echoed Mass Retirees sentiments from the Senate floor. Friedman sponsored the proposal to permanently grandfather existing retirees under current contribution percentage rates – a policy adopted by the Commonwealth for state retirees since 1994.

“We’re getting to a point where people absolutely cannot afford going to the doctor. They’re choosing between food, rent and staying healthy”, said Friedman.

Rep. Mike Day (D-Stoneham) carried the same amendment in the House. Day, whose district includes Winchester (see article pg. 4), has also been a staunch retiree advocate.

The original moratorium was included within the Municipal Health Insurance Reform law, known as Chapter 69, Acts of 2011. This law greatly increased the authority of local governments to make certain changes to health insurance plans without collective bargaining. These changes may include joining the state’s

Group Insurance Commission or making plan design changes that mimic those of the state plan.

With the goal of protecting local retirees (including retired teachers) from the potential double impact of higher copayments and deductibles, along with increased insurance premium contribution percentage rates, the legislature created a temporary prohibition on local governments increasing retirees’ premium percentage rates.

Known as the “Moratorium”, the protection was automatically implemented for any community adopting the provisions of Chapter 69.

“At this time seven years ago, we had a full-blown battle on our hands over the future of retiree healthcare. We fought hard to ensure that local retirees had a voice in the decision making process and that they had some protection from unfair cost shifting,” recalls Association General Counsel Bill Rehrey. “Due to these efforts, we now have local retirees serving on nearly 200 Public Employee Committees, with direct input into local health insurance policy. We believe that it is not only fair, but having retirees participate in these negotiations leads to better outcomes for everyone involved.”

Association officials are now focused on pending legislation before the Committee on Healthcare Finance that could be a viable vehicle for a permanent fix. The bill focuses on healthcare cost containment and overall reform that impacts all Massachusetts residents.

In addition to municipal healthcare, the Committee is also considering various proposals impacting the state’s Group Insurance Commission. These include proposals restructuring the 17-member commission, as well as requiring public hearings prior to plan design changes being approved. Mass Retirees also plans to pursue the bill as a vehicle to increase the state’s basic life insurance benefit from $5,000 to $10,000.