Huge Turnout For Healthcare Hearing

JANUARY 2014 VOICE: Active employees turned out in droves for a public hearing on retiree healthcare reform held at the State House on Halloween.

The marathon hearing, before the Joint Committee on Public Service, lasted more than 6 hours. More than five hundred people filled the meeting room, bearing witness to a host of government, retiree and labor officials who testified on the proposal known as H59.

Filed by Governor Deval Patrick last February, H59 would dramatically alter retiree healthcare benefits for future retirees. The bill, in its current form, does hold harmless or grandfather many career employees under the existing retiree healthcare law.

However, the Committee heard detailed testimony from labor representatives and individual employees who would be impacted by H59, as currently drafted. A common denominator amongst affected employees is that many entered public service later in life, often having been recruited from a private sector career due to a specialized skill.

Prior to hearing from concerned employees, Committee Chairmen Aaron Michlewitz (D-North End) and Will Brownsberger (D-Belmont), heard first from the aministration and their legislative colleagues.

Secretary of Administration and Finance (ANF) Glen Shor testified in favor of H59 on behalf of Governor Patrick. He expressed a willingness to work with the legislature, our Association and public employee unions to address lingering concerns the bill unfairly impacts some current employees.

Senator Ken Donnelly began by urging a cautious approach to legislative action on H59. “Before we act, we must be mindful of the impact these changes might have on low wage earners and those who enter public service later in life,” said Donnelly.

“A lot of questions need to be answered before I can feel comfortable supporting this bill as it is currently drafted,” Donnelly continued. “And it should go without saying that active employees, who are close to retirement age, cannot have the rug pulled out from under them.”

Donnelly’s sentiments were echoed by a chorus of elected officials and labor leaders, who urged the Committee to fully examine the potential impact on active employees. They also called on the legislature to maintain the retiree protections currently included in H59.

As members know, H59 exempts all current retirees and survivors from the changes. In fact, it also adds new protections for retirees by preventing increases in insurance contribution rate percentages after someone is retired. The bill also requires all municipalities to offer 50% coverage for surviving spouses.

However, the longstanding opponents to these benefits and protections, the Mass. Taxpayers Foundation and Mass. Municipal Association, continue to wage a battle to strike these protections from the bill.

Association Legislative Liaison Shawn Duhamel testified on behalf of the Association, along with Andrew Powell who represented the AFL-CIO. Powell and Duhamel were also the respective Labor and Retiree representatives on the 2012 Special Commission on Retiree Healthcare. H59 is the byproduct of the report filed by the 12-member Commission last December.

Both testified on their experience working with the Commission, as well as described the impact that recent healthcare changes are already having on retiree plans. For instance, Chapter 69 of the Acts of 2011 saved over $200 million in the first year alone – much of it achieved through cost shifting.

“Since H59 was filed last year, we’ve heard from a number of active employees who inadvertently fall through the cracks and would not be protected by the grandfather clause. There are also reasonable concerns being raised by correction officers and State Police who, due to the nature of their work, often retire at a younger age,” explained Duhamel. “These are all issues that should be able to be resolved and still end up with a bill that produces long-term savings.

“Retiree healthcare costs, known as OPEB (Other Post Employment Benefits) are a national issue being dealt with all across the country right now. It is not something that will go away or that can be ignored; otherwise we endanger all retirees and employees. The tough part is finding a fair way to make healthcare sustainable over the long run, without harming existing retirees or employees. We believe there is a way to get this done.”

The Public Service Committee will likely review H59 through the end of 2013, then report a bill out to the House Committee on Ways and Means early in 2014.

“It is unlikely that we’ll see a bill passed before spring of 2014. The important thing is that the legislature is not rushing a bill through, but rather taking their time to address the issue carefully,” continued Duhamel. “We’ll keep reporting new info as it becomes available, in our newsletter and on the website.”