In a move to update state retiree healthcare benefits, Gov. John Carney acted on the final bills in a package following a multi-year reform effort. The legislation comes after a lawsuit prompted by the Carney administration’s decision to switch current retirees to a less-optimal Medicare Advantage plan. The General Assembly created the Retiree Healthcare Benefits Advisory Subcommittee which delivered recommendations to preserve promised benefits while controlling rising healthcare costs.
The bills championed by State Rep. Paul Baumbach, passed overwhelmingly but faced mixed actions from Carney due to fiscal concerns. However, on Monday, Carney signed three bills that increase pre-funding for retiree health benefits, alter the state’s subsidization vesting schedule, and require a pensioner coordination of benefits policy. The estimated liability for retiree health benefits was $8.9 billion, with $8.4 billion unfunded at the time and expected to grow to $20.7 billion by 2042 if no changes were made.
While Carney did not fully support House Bill 377, which requires the state to offer eligible pensioners a plan comparable to the current Special Medicfill Medicare Supplement plan, he signed another bill accelerating funding efforts. Baumbach highlighted the importance of treating employees with respect and ensuring transparency in the process moving forward. Despite Carney’s reservations, Baumbach believes the new laws will provide more accountability and respect for retirees and employees. The legislation aims to secure the long-term sustainability of retiree healthcare benefits and continue the progress in improving the state’s finances.
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