Friday, June 14, 2024

Bipartisan bills build on Delaware House efforts to protect state retiree benefits

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  • The Delaware House in March approved a bill, which has yet to be voted on by the state Senate, that prohibits the state from considering Medicare Advantage plans.
  • Another bill passed by the House made changes to the State Employee Benefit Committee, which is responsible for managing state employee and retiree benefit coverage.
  • A new package of bipartisan bills aims to build on those earlier efforts to protect retiree’s health care coverage and encourage fiscal responsibility.

A package of three bipartisan bills introduced in the Delaware House of Representatives will build on earlier efforts to protect state retiree’s health care benefits and encourage fiscal sustainability.

The House bills, which are sponsored by Rep. Paul Baumbach, House Minority Leader Mike Ramone, Senate Majority Leader Bryan Townsend and Senate Minority Whip Brian Pettyjohn, would incorporate more of the recommendations made by the Retiree Healthcare Benefits Advisory Subcommittee.

The bills would make adjustments to the health insurance premium the state covers for eligible pensioners; create a pensioner coordination of benefits policy; and direct the state to provide eligible pensioners with similar coverage to the current Special Medicfill Medicare Supplement plan.

“With the introduction of these three measures, we’ve now successfully translated all seven (subcommittee) recommendations into meaningful legislation,” Baumbach said in a news release. “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.”

The latest bills come following Delaware House approval of two other legislative reforms to state retiree benefits that were sparked by a legal debacle that ensued when the state switched retirees’ health care coverage to Medicare Advantage without their input. 

LATEST ON LAWSUIT: Why is Delaware appealing ruling that blocked Medicare Advantage plan for state retirees?

Delaware’s switch prompted a group of state retirees to file a lawsuit against Delaware in Superior Court in 2022. The courts issued a stay on implementing Medicare Advantage and retirees continue to receive their benefits through the Medicfill Supplement, but Delaware continues to fight the matter in court.

Retiree benefit bills passed by House

The Delaware House in March passed two bills, House Bill 281 and 282 – sponsored by Baumbach – that prohibit the state from considering Medicare Advantage plans for state retirees and also made several changes to the State Employee Benefit Committee.

The committee is responsible for managing state employee and retiree benefit coverage.

Both bills unanimously passed the House on March 12, however, neither have come to a vote by the full Senate yet.

“These bills are a meaningful first step toward restoring trust with our state retirees, who have served our state government for many years under the assumption that these benefits would be available for them when they retired,” Baumbach said in a news release after the bills passed. “It’s time that we put the healthcare needs of our state retirees at the forefront and address the very real concerns our retirees have raised over the past two years.”

What are the latest proposals?

House Bill 375 would adjust the portion of the health insurance premium the state covers for eligible pensioners hired on or after Jan. 1, 2025, according to the release. 

Under this bill, the news release stated 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 EMPLOYEE BENEFITS: Why Delaware is eying a 27% premium hike on state employees’ health insurance

House Bill 376 would create a pensioner coordination of benefits policy similar to the spousal coordination of benefits policy currently in place. Under the bill, a state employee retiring after 20 years of service would no longer be qualified for full, primary coverage under the state’s plan if they secure another job in the private sector with health insurance benefits. 

The measure would impact eligible retirees hired after Jan. 1, 2015 who are eligible for health insurance benefits through a new employer. Spouses of state employees or retirees also cannot receive full coverage from the state if they have access to health insurance through their own employer. 

“Controlling the rising cost of health insurance should be one of our main priorities as legislators,” 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.” 

House Bill 377 would direct the state to provide eligible pensioners hired before Jan. 1, 2025 with a plan similar to the current Special Medicfill Medicare Supplement Plan. For those hired after that date, when they reach age 65, the state could offer a different Medicare supplement plan as long as it’s “not a high deductible plan.”

All three bills have been assigned to the House Administration Committee.

Got a tip? Contact Amanda Fries at afries@delawareonline.com. Follow on her on X at @mandy_fries.

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