MARCH 2005 - Under-65 May Pay More - For the third straight year, Governor Mitt Romney has targeted public retirees in his annual (FY06) budget proposal. This time around, the governor has included a proposal that, if passed, would require certain retirees, insured by the state's Group Insurance Commission (GIC) and under age 65, to pay substantially more for their state-sponsored health insurance - up to 150% more!

The plan, which was covertly included in the GIC's line item within the Fiscal Year '06 State Budget, requires retirees, under age 65 and not subject to Medicare, to contribute 25% of the health insurance premium. Instead of the 90/10 or 85/15 split these retirees are currently under, the new contribution rate would be 75/25.

In previous years, Romney had proposed raising the contribution rate for all retirees to 75/25, as well as forcing retirees into less expensive and arguably inferior insurance plans. Association lobbyists, working closely with Legislative Leaders from both parties, were successful in stopping those changes from taking effect.

As has been the case in past proposals from the Romney Administration, the budgetary language was unclear as to exactly how the plan could be carried out. After reviewing the language included in Fiscal Year 2006 proposal, it seems clear to Association officers that the governor intended to target younger non-Medicare retirees as a means to save money.

"It's obvious that the governor is trying to save money by forcing non-Medicare retirees, under 65, to pay more," explains Association President Ralph White. "Members can be certain that we are doing everything in our power to stop this proposal dead in its tracks."

Romney's insurance proposal also includes language that would force all active state employees, regardless of their date of hire, to contribute 25% towards the insurance premium. Currently, all active state employees, hired prior to July 1, 2003, contribute 20% towards their insurance, while those, hired after that date, contribute 25%.

Members, who are retired teachers and state employees, will be relieved to know that the governor did include their 3% annual COLA in his budget. When passed by the Legislature, the increase will take effect as of July 1 and remains based on the first $12,000 of one's pension. Editor's Note: Association officials are currently working with the Public Employee Retirement Administration Commission (PERAC) on its study to increase the COLA base from $12,000.

In his first two budget proposals, Romney failed to include a COLA (Last year, the governor added the COLA to his proposal weeks after it was initially filed). As a result, Association officials had to appeal to Legislative Leaders for the inclusion of the COLA in both the House and Senate budgets, then wait to see if the increase fell victim to the governor's veto pen.

Last year, House Republican leaders were upset and took exception to the lack of support for COLAs from the Administration. This led to House Minority Leader Brad Jones (R-Reading) insisting that the governor include the full 3% COLA this year.

"After having grown accustomed to the governor ignoring the COLA, we were pleasantly surprised to have his support this year. We are confident that the Legislature will once again support public retirees and include the full 3% COLA in their version of the budget," said Association Legislative Liaison Shawn Duhamel. "For the past eight budget cycles, they have been there for retirees and approved the 3% COLA.

Taking nothing for granted, we will shortly meet with leaders in both the House and Senate to ask for their support again this year."