The Retiree Healthcare Benefits Advisory Subcommittee finalizes its recommendations on updated healthcare premiums for retired state employees.
RHBAS voted to pass a consolidated list of recommendations on state retiree healthcare premiums that, if adopted, will go into effect on Jan. 1, 2025.
The subcommittee voted to increase the years of service needed before retirement in order to reach the maximum state share of healthcare premiums.
Previously, 100% of a pensioner’s healthcare premium would be paid by the state if they served for at least 20 years – if implemented, those hired after Jan. 1, 2025 will have to serve for at least 25 years to meet that mark.
“This should save the state dollars, and because of the grandfathering that we’ve adopted, our recommendations won’t be seen for quite a while. But it is one that adds number of years and also should help us in retaining employees," said the subcommittee’s co-vice chair State Rep. Paul Baumbach.
"Grandfathering" means these changes will not affect any state employee hired before Jan. 1 2025.
Additionally, RHBAS advises two Medicare Supplement plans be provided for a retiree with 25+ years of service with the retiree paying 5% of the premium and the state paying 95%.
The percentage split was widely debated, with Baumbach expressing concerns that the state’s 95% share would be too much and a 7%-93% split would help save taxpayers down the road.
“It is, to me, not unreasonable at all for 40 years from now, a 65 plus-year-old retiree has to pay 7% instead of 5% of the cost," he said.
Baumbach’s initial attempt to pass a range of 5%-7% failed in a vote of 5-6 with two abstentions, and the final decision on 5% passed unanimously with one abstention.
The recommendations will now go to the State Employee Benefits Committee.
