Legislature Extends Municipal Insurance Moratorium

Retiree Insurance Reform Likely Topic in 2017-18 Session

JUNE 30, 2016: On the final day of Fiscal Year 2016, the State Legislature passed a new state budget for the coming fiscal year. Contained within the budget, as Section 45, is a two-year extension of the Municipal Retiree Insurance Premium Moratorium.

As members know, this protection was set to expire as of 7/1/16. Originally passed in 2011 as part of the Municipal Insurance Reform Act (Chapter 69), the Retiree Premium Moratorium prevents cities and towns that implement plan design changes or join the state’s Group Insurance Commission (GIC) from also increasing retiree premium contribution percentage rates.

“Quite simply, this law protects retirees from the unfair and unaffordable cost of higher out-of-pocket costs and increased monthly insurance premiums due to higher contribution rates. Municipalities that implement the provisions of Chapter 69 are given a lot of flexibility to control local insurance costs, but they must do so in a fair manner,” explains Legislative Director Shawn Duhamel, who played a key role in the development of the 2011 reform law.

“Mass Retirees views the moratorium and this extension of the sunset clause as a temporary measure that ensures retirees are treated fairly while a long-term solution is developed. Our Association is committed to working with the Legislature, as well as Governor Baker and our union allies to pass a retiree insurance reform law during the next Legislative Session. We must have a permanent solution to this complex problem, one that does not unfairly require retirees to shoulder a financial burden that they cannot afford.”

Also included within Chapter 69 was the creation of a Special Commission on Retiree Healthcare, on which Mass Retirees held a seat. The Commission filed its report in December 2012, which then became the basis for Governor Deval Patrick’s proposed H59.

Despite the support of our Association and several public employee unions, H59 was not taken up by the legislature.

Governor Charlie Baker now has the FY17 budget before his Administration for review. He has until July 10th to sign the budget, as well as veto a section in which he disagrees.

“We hope the Governor will approve Section 45 and extend the protection for local retirees for another two years. It is only fair that our local members enjoy the same protections as state retirees, at least until a long-term solution is worked out,” said Association President Frank Valeri. “Thankfully, we do have the support of several key Republican Legislators, such as Senators Vinny deMacedo and Don Humason. We are now working closely with them in an attempt to gain the support of the Administration.”

Members are encouraged to contact Governor Baker’s office and ask that he support Section 45, of the FY17 Budget.