H59 Includes Key Retiree Protections

FEBRUARY 16, 2013: This week, Governor Deval Patrick filed a legislative proposal that would significantly change healthcare benefits for future retirees, while grandfathering and protecting current retiree benefits from knee-jerk changes in contribution percentage rates.

The much anticipated bill, H59, closely mirrors the 2012 report filed by the Special Commission on Retiree Healthcare. As members know, our Association and the AFL-CIO each had seat on the Commission and played a central role in the negotiations that last some 10 months.

Like the Commission's report, H59 holds current retirees harmless from the changes in retiree healthcare benefits brought about within the legislation. It also exempts active employees who are close to retirement age (see summary below for a detailed analysis). Most importantly, the bill also prevents municipalities from increasing retiree contribution percentages for three years. After that time, rates can only be increased prospectively for new retirees and survivors only.

These key provisions were supported by eleven of the twelve Commission members, along with Governor Patrick and Treasurer and Receiver General Steve Grossman. Both characterized the hold harmless clause as fair to current retirees, many of whom live on fixed incomes.

H59 is now before the Joint Committee on Public Service, which is chaired by Senator William Brownsberger and Representative Aaron Michlewitz. While no public hearing has yet to be scheduled, Beacon Hill observers anticipate the Committee may take up H59 by early April.

"The filing of H59 should be looked at as the beginning of the legislative process regarding this new round of retiree healthcare reform. A lot of work remains to be done and Public Service is the first stop in the legislative process," explained Legislative Liaison Shawn Duhamel, who served as our Association's representative on the Commission. "Governor Patrick was true to his word and has protected current retirees within this bill. But we still have work to do in ironing out the details, making sure individual groups are properly protected and ensuring that our retiree protections remain intact.

"No one should overlook the fact that we have organizations like the MMA and Taxpayers Foundation working in opposition to these protections. Some don't think the bill goes far enough in cutting back on the benefits, despite the fact that it will save $20 billion. Needless to say, we have a lot of work to do over the next five or six months."

Full Copy of H59, please click here.

Click here to check status of H59.

H59 Bill Summary472.95 KB
Governor's H59 Filing Letter139.38 KB