DOVER- Building on the General Assembly’s earlier efforts to address healthcare benefits concerns for current and future state retirees, lawmakers introduced three bills on Thursday that would protect state retirees’ healthcare benefits while promoting fiscal sustainability.
The bipartisan measures, prime sponsored by Rep. Paul Baumbach, House Minority Leader Michael Ramone, Senate Majority Leader Bryan Townsend, and Senate Minority Whip Brian Pettyjohn, would complete the recommendations submitted to the General Assembly by the Retiree Healthcare Benefits Advisory Subcommittee (RHBAS).
“Our RHBAS was tasked with a tremendous responsibility, keeping our promise to deliver quality healthcare benefits to current and future retirees, addressing the root causes of the spikes in healthcare, and ensuring the financial sustainability of the program in the coming years,” said Rep. Paul Baumbach
“With the introduction of these three measures, we’ve now successfully translated all seven RHBAS recommendations into meaningful legislation. We arrived at these recommendations through a collaborative, all-hands-on-deck approach, recognizing that while compromises were necessary, we’re implementing them in a responsible, phased-in manner. This ensures that we can continue delivering on our commitment to retirees while safeguarding the long-term viability of our benefits program.”
In 2023, Senate Bill 29 established the RHBAS, a group consisting of legislators, administration officials, state retirees, and public sector union representatives. Their mandate was to examine several aspects of retiree healthcare, including strategies to address the Other Post-Employment Benefits (OPEB).
The estimated liability for retiree health care benefits is currently $8.9 billion, of which $8.4 billion is unfunded. Left unchecked, the net unfunded liability is expected to grow to $20.7 billion by 2042.
“I want to thank my co-chairs Rep. Baumbach and Sen. Townsend for ensuring that the recommendations the retiree subcommittee brought forward do not sit on a shelf. This group laid out a clear roadmap to protect and preserve the best healthcare not only for our retirees, but for future generations of state workers,” said Lt. Governor Bethany Hall-Long, who chairs the RHBAS.
“We heard our retirees, and with these bills, Delaware is taking action and keeping our promise to them to ensure no Medicare Advantage. These are important steps toward ensuring fiscal responsibility and long-term sustainability so we can provide the best healthcare system for our retirees and our current and future state workers.”
House Bill 375 would adjust the portion of the health insurance premium the state covers for eligible pensioners hired on or after January 1, 2025. Under HB 375, the state would cover:
- 50% of the premium for eligible pensioners with at least 15 years of service upon retirement.
- 75% of the premium for eligible pensioners with 20 to 25 years of service upon retirement.
- 100% of the premium for eligible pensioners with 25 years or more years of service upon retirement.
“State workers deserve to know they can count on the benefits promised to them during their dedicated careers in public service,” Senate Majority Leader Bryan Townsend said.
“The legislation filed today to enact the final set of recommendations from the Retiree Healthcare Benefits Advisory Subcommittee will help ensure that the robust health benefits earned by our current retirees remains in place, while securing a strong retiree benefit package for future generations of state workers,” he said. “The affordable, long-term retiree healthcare plan that will result from this work was made possible thanks to the passion and commitment of our retiree community, the advocacy of the dedicated labor unions who fight for our state workers each and every day, and the steady hand of Lt. Governor Bethany Hall Long, who led RHBAS through 20 public meetings with grace and compassion.”
HB 376 would create a pensioner coordination of benefits policy similar to the spousal coordination of benefits policy currently in place. Spouses of state employees or retirees cannot receive full, primary coverage under the state’s health plan if they have access to health insurance through their own employer.
Under this bill, a state employee who retires after 20 years of service but then secures a job in the private sector with health insurance benefits would no longer qualify for full, primary coverage under the state’s plan.
The pensioner policy proposed under HB 376 would impact eligible retirees hired after January 1, 2015 who are eligible for health insurance benefits through a new employer.
“Since the summer of 2022, I have been actively working – in a bipartisan fashion – to protect the healthcare benefits that have been earned by our retirees. As I have said from day one, if a retiree was promised a benefit as part of their employment package, the last thing that state should be doing is trying to steal it from them. As with these bills, we are making a concerted effort to ensure that retirees have the peace of mind that their healthcare benefits are in place and will be sufficiently protected,” said Rep. Ramone.
“Controlling the rising cost of health insurance should be one of our main priorities as legislators,” Senate Minority Whip Brian Pettyjohn said.
“It should also be our duty to fulfill the promises made to the state pensioners when they started working for the state. This package of legislation will do just that.”
HB 377 would direct the state to provide eligible pensioners hired before January 1, 2025, with a plan similar to the current Special Medicfill Medicare Supplement plan. For those hired after January 1, 2025, when they reach age 65, the State could offer different Medicare supplement plans, so long as it is not a high deductible plan.
All three bills have been assigned to the House Administration Committee.
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