House Budget Debate Begins April 23rd

House Budget Debate Begins April 23rd

Retirees Back Life & Health Insurance Amendments

April 18, 2018:  Mass Retirees backs four amendments to the FY19 budget, which is set to be debated in the House beginning April 23rd. The amendments range from increasing the basic state life insurance, protecting against increases in local health insurance contribution percentages, lifting hourly restrictions on part-time work in public service and granting Mass Retirees a seat on the state’s Group Insurance Commission. 

Each amendment will be reviewed and debated during the FY19 budget debate, which takes place in the House of Representatives next week. The State Senate is expected to hold its own budget debate during the week of May 21st. The two versions of the budget then go to conference, where House and Senate leaders negotiate a compromise budget for final legislative approval before sending the proposal to Governor Baker. 

“If members are either impacted by or have a particular interest in one or more of the amendments listed below, we ask that you contact your Massachusetts state Representative and ask that they support the amendment as a cosponsor,” says Legislative Director Shawn Duhamel. “I should also note that while we are now working on many different issues impacting public retirees, these four issues are the most pressing and stand the highest likelihood of being adopted into the budget.”

The most pressing issue in terms of immediate impact is Amendment #1048, filed by Rep. Mike Day (D-Stoneham). It seeks to protect municipal retirees from serious increases in health insurance premiums by locking in contribution rate percentages for existing retirees. The same policy already exists for state retirees, who contribute at three different levels depending on their date of retirement.

Click here to call or email your State Representative

Mass Retirees Sponsored Amendments to the FY19 House Budget

#379, Cullinane: Group Insurance Commission Composition

Filed in conjunction with the AFL-CIO and coalition of public employee unions, the amendment would reconfigure the 17-member GIC to ensure proper representation of retirees and active employees. The amendment will also provide for greater transparency and input by stakeholders in advance of provider selection and plan design decisions being made.

  • Grants Mass Retirees direct representation on GIC
  • Adds MOSES and SEIU, Local 509 to GIC – granting labor 7 of the 17 Commission seats
  • Requires that of the governor’s direct appointees, one must be a health economist and two must have experience in health care policy
  • Establishes criteria for transparency, notification and public input prior to major changes being approved
  • No cost to the Commonwealth

#917, Cahill: (State) Basic Life Insurance

Increases the basic life insurance benefit for state retirees and employees by $5,000 to the new benefit level of $10,000. The current $5,000 benefit was established in 1985 and has remained unchanged for 33 years.

  • Basic life insurance serves as retirees’ “death benefit” and is intended to cover funeral and burial expenses.
  • Average funeral home costs alone have increased from $2,837 in 1985 to more than $8,508 in 2014, according to the NFDA report.
  • Benefit change would take effect January 1, 2019 with a cost of just $4.5 million to the Commonwealth for FY19.
  • Funding sources include the GIC’s FY18 surplus ($51 million as of February 28th), as well as ongoing savings generated by higher out-of-pocket costs, vendor selection and plan design changes

#1048, Day: (Municipal) Retiree Protection

Grandfathers the local health insurance premium percentage paid by municipal retirees at the current ratio split. Cities and towns would still be able to increase premium percentages paid by future retirees, but would be required to hold-harmless existing retirees.

  • Protects local retirees from substantial increases in local insurance premium percentages
  • Permanently extends the protections set forth in municipal insurance moratorium established by the legislature within the 2012 Municipal Insurance Reform Act
  • Standardizes the policy established by the state in 1994, whereby existing state retirees are grandfathered and held harmless from future increases in health insurance premium percentages
  • State retirees now pay three different levels of contribution, based upon the year of retirement: 90/10, 85/15 and 80/20
  • Does not increase municipal costs

#1124, Cusack: Post Retirement Earnings

Removes the annual hourly limitation for public retirees who return to part-time public sector employment within Massachusetts. Currently, the law limits both the annual earnings and hours worked (limit is 960 hours a year).

  • Hourly limit places an unfair burden on lower paid retirees
  • Hourly limit is a difficult administrative burden to manage for the employer, retirement system and retiree
  • Amendment does not alter existing restrictions on earnings
  • Not only does this amendment carry no cost, the experience and knowledge brought by part-time employees can be a significant benefit and cost saver

Click here to contact your State Represenative to ask for their support of Mass Retirees' amendments to H4400.