Senate Budget Debate Begins Wednesday

Insurance Moratorium Pending

MAY 20, 2014: State Senators will begin debate on the FY15 budget beginning Wednesday morning. The debate, which is expected to last at least three days, will determine the Senate’s version of the state budget for the coming year.

Of utmost importance to our Association is amendment #89, filed by Senator Ken Donnelly (D-Arlington). Senators McGee, Lewis, Moore, Keenan and DiDomenico have signed onto the amendment as cosponsors.

Nearly identical to language passed within the House FY15 budget last month (outside section 32), the Senate amendment would extend the moratorium prohibiting some municipalities from increasing retiree health insurance premium contribution percentages through July 1, 2016.

The current law prohibiting such increases is set to expire this July 1, thus potentially leaving thousands of retired teachers and other municipal retirees vulnerable to increases in premium contribution percentages.

In order for the moratorium to apply, a city or town must have implemented the provisions of Chapter 69, Acts of 2011. This includes having used the law to join the state’s Group Insurance Commission or implement plan design changes at the local level.

“The idea behind the moratorium was to allow time for the various insurance reform laws to work. Cities and towns have saved in excess of $200 million a year as a result of Chapter 69. Those savings were largely due to increased co-payments, deductibles and other changes made to retiree insurance plans,” explains Association Legislative Liaison Shawn Duhamel. “It is wrong to allow further increased costs to be pushed onto retirees without allowing the new system time to fully work.”

Once the Senate approves its version for the budget, the two branches will meet in conference committee to set a final FY15 state-spending plan. The budget takes effect as of July 1, 2014.

Editor's Note: Like the Governor and House, Senate leaders have endorsed a full 3% COLA on a $13,000 base. The COLA takes effect for the July pension checks for eligible retirees.