Life Insurance & Health Insurance Focus of Beacon Hill Hearing

Affordability, Representation and Transparency Key Issues

JULY 25, 2019: Mass Retirees and union leaders packed a State House hearing today that focused on a legislation impacting health, dental and life insurance benefits for public retirees and active employees. Chaired by Rep. Jerry Parisella (D-Beverly) and Senator Mike Brady (D-Brockton), the Joint Committee on Public Service heard testimony on more than 40 bills, nine of which are sponsored by Mass Retirees.

Affordability, Representation and Transparency Key Issues

JULY 25, 2019: Mass Retirees and union leaders packed a State House hearing today that focused on a legislation impacting health, dental and life insurance benefits for public retirees and active employees. Chaired by Rep. Jerry Parisella (D-Beverly) and Senator Mike Brady (D-Brockton), the Joint Committee on Public Service heard testimony on more than 40 bills, nine of which are sponsored by Mass Retirees.

Leading off the hearing, Mass Retirees President Frank Valeri offered heart-felt testimony on our Association’s proposal to increase the state’s basic life insurance benefit to $10,000. The $5,000 increase would represent the first change since 1985 – some 34 years ago! Valeri spoke of his personal experience in recent years with the loss of close family members and the need to increase the benefit to a level that better serves the purpose of covering funeral and burial costs.

Association Legislative Director Shawn Duhamel followed Valeri, offering testimony on five different legislative proposals impacting various aspects of retiree health insurance benefits. He addressed the growing concern regarding health insurance affordability.

“Overall, retirees like their health insurance plan and are happy with the quality of the coverage. The problem we have is the high out-of-pocket costs, particularly when it comes to copayments and deductibles paid by non-Medicare retirees,” said Duhamel. “We also need to ensure that retirees have a voice at the table when these benefits and costs are being discussed. This applies both the state Group Insurance Commission, as well as municipal health insurance groups. Retirees and active employees deserve to be represented.”

An example of the local fight to obtain municipal representation is contained within H.2247, filed by Rep. Dylan Fernandes (D-Falmouth) on behalf of Falmouth Firefighters Local 1397. The bill would require employees and retirees be represented on the board of the Cape Cod Municipal Health Group, a joint purchaser of health insurance benefits for most communities on Cape Cod.

“Both active employees and retirees have a lot at stake here and deserve representation,” said Falmouth Fire Lt. Scott Starbard, who is also president of Local 1397.

AFL-CIO President Steve Tolman echoed the testimony of Mass Retirees and union leaders when he questioned the dramatic rise in out-of-pocket costs in recent years, at both the state and local levels. The AFL-CIO continues to lead a state-wide coalition of public employee unions and retirees working together on all healthcare and pension issues. While not a union, Mass Retirees is a proud member of the coalition.

Following today’s hearing, the Public Service Committee will continue the evaluation of the legislative proposals. We will report further information as it becomes available.

The following are the bill numbers, lead sponsors and summaries of the Mass Retirees’ sponsored legislation heard today:

S1489 & H2312

State Basic Life Benefit Increase

Sponsors: Sen. Brendan Crighton and Rep. John Lawn

The State Employee and Retiree Basic Life/Death benefit of $5,000 was established in 1985, 34 years ago: 

  • Since that time funeral costs have increased 300%
  • Average funeral home costs alone have increased from $2,837 to $8,508, according to the most recent NFDA report.
  • Legislature recently recognized this inflationary fact by increasing the death benefit for unemployed private sector individuals from $4000 to $11,067 under the 2014 Unemployment Insurance Reform Act
  • The only option state retirees have to provide a realistic level of death benefit is to buy $5,000 of additional life, which is unaffordable for those over the age of 74
  • For more than 22,032* State retirees, age 75 and older, the cost to buy additional $5,000 life would essentially wipe out any annual COLA benefit
  • The average pension for retirees over the age of 75 is approximately $28,808, most all receive very little or no Social Security benefits.
  • At age 85 or older a non-smoker retiree must pay over $1,000 a year for the additional $5,000 coverage, there are 7,572* retirees over such age.

*Data from January 1, 2018 State Valuation used to compile facts.


H2219 & S1523 

Local Retiree Insurance Protection

Sponsors: Rep. Day & Sen. Feeney

Currently, local governments can elect to have their retirees contribute less than 50% of the total health insurance premium; however, the percent under 50% can be increased on all existing and future retirees at any time without their approval. Under the state GIC, any increases in the state retiree’s premium contribution have been applied prospectively to future retirees and not retroactively to existing retirees. Our initiative amends the municipal insurance law (Chapter 32B) so that when an increase in the premium contribution by local retirees is implemented, it will be applied only to those who retire after the implementation date. Those, who are retired before the implementation date, will be held harmless from the increase, which is consistent with the established state policy.


Local Withdrawal from GIC

Sponsor: Rep. Golden

Under the Municipal Insurance Law (Chapter 32B), municipalities, school districts and other local units, whose retirees and employees are insured by the state GIC (Group Insurance Commission, must notify the GIC by a December 1 deadline if it intends to withdraw from the GIC effective on the next July 1. Currently the GIC determines plan design (i.e., deductibles, copayments, tiering) and premium rates, effective on July 1, during February of that same year – but some 3 months after the December 1 deadline of the prior year.

Our members who are serving on local health insurance negotiating groups, known as PECs (Public Employee Committees), have voiced serious concerns that this “time gap” (between the December 1 deadline and the GIC’s decisions during the next February) prevents them from more fully comparing the GIC with other municipal health insurers and making the best possible decision to remain or leave the GIC. This bill seeks to address their concerns by eliminating the existing time gap and extending the deadline by 3 months (from December 1 to March 1) so that the PECs and local officials can make a more informed decision on whether to remain or leave the GIC.


Retiree Healthcare Initiative

Sponsor: Rep. Mariano

In 2012 a Special Commission on Retiree Health Care Reform, on which Mass Retirees was represented, issued a comprehensive report to address future retiree health care costs. Our initiative reflects certain proposals from the Commission’s report. It will make substantive changes to the healthcare benefits offered to future state and local retirees. Like the Commission’s report, this bill will grandfather existing retirees and survivors under the current law. Even more importantly, it grants additional protections and potentially enhanced benefits to retirees and survivors. As for active current employees, the proposed changes will only be applied upon the retirement of active employees who are hired on or after January 1, 2020 (“new hires”) and in our opinion, will not significantly impact new hires who become career employees.


GIC Composition

Sponsor: Sen. Feeney

Currently the state Group Insurance Commission (GIC) is governed by a 17-member Commission, including just one state retiree who is appointed by the governor. The Commission also includes six “public members” appointed by the governor without any qualifications for their appointment. This bill seeks to provide a second, stronger voice for state and local retirees enrolled in the GIC by replacing one of the governor’s six public members with the Mass Retirees president or their designee.


H2222 & S1575

Sponsors: Rep. Decker & Sen. Pacheco

(a) Minimum Contribution by Local Governments.

Currently there are local governments that make no contribution to the premium paid by a survivor. As part of its 2012 report, the Special Commission on Retiree Healthcare recommended that communities pay at least 50% of the premium paid by a survivor. This bill reflects the Commission’s recommendation for a minimum 50% contribution by a community to a survivor’s premium.

(b) Retention of Coverage. 

All survivors, insured by the state (Chapter 32A) or locally (Chapter 32B) can continue their insurance coverage but forfeit it when they remarry. This bill would allow survivors to remarry and continue their coverage upon a showing that they are not eligible for any other group heath insurance coverage except for Medicare. If passed, this proposal would place the health insurance law in parity with the survivor’s pension retention law.

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