On February 12, 2013, Governor Patrick filed legislation (HB-59) to reform retiree healthcare benefits based on the recommendations announced in January which were included in the report released by the Commission to Study Retiree Healthcare and Other Non-Pension Benefits (OPEB). The bill had been referred to the Joint Committee on Public Service and then had a public hearing on October 31, 2013 in the Gardner Auditorium at the State House. At this time, the bill resides in the Joint Committee of Public Service and the reporting date has been extended until July 31st, 2014.
The Pension Reform Bill was signed November 2011, established the Commission and its members include Republican and Democratic members of the legislature and representatives from the Executive Office of Administration and Finance, Treasurer’s Office, Group Insurance Commission, Massachusetts Municipal Association, and Labor.
NOTE: These proposed reforms would not apply to any current retirees.
The legislation filed proposes:
- Increasing the minimum years of service to qualify for health insurance benefits from 10 to 20 years.
- Increasing the minimum age for eligibility to 60 (for Group 1), 55 (for Group 2) and 50 (for Group 4).
- Prorating benefits on a scale from 50% premium contribution after 20 years to the maximum current benefit (80% of premium for State retirees) at 30 years.
- Exempting current retirees and certain employees who are nearing retirement age from reforms.
- Exempting future ordinary disability retirees from the reform until the 2014 Affordable Care Act exchange is available. At that time, ordinary disability retirees shall receive a 50% premium contribution for 10 to 20 years of service. Beyond 20 years, prorating will apply.
- Providing future surviving spouses with a minimum 50% employer premium contribution.
The text of House 59 is now available on the Legislature's website. A summary of the major points and are also available. We will continue to keep you updated on this topic and the status of this legislation.