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State Employee Retirees Association
Executive Summary of our opposition to HB 5545
The State Employee Retirees Association (SERA) is a 14,000 member statewide organization organized for and dedicated to maintaining the economic well-being of retired state employees and their beneficiaries. Our goal is to maximize the purchasing power of our pensions and prevent them from being eroded by inflation and significant increases in the costs of our health care.
SERA opposes HB 5545 which would transfer the responsibility for the development, approval, and administration of the state retirees — health care plan from the Civil Service Commission (Office of Employee Benefits) and the Director of the Department of Management and Budget to the Office of Retirement Systems and the State Employees Retirement Board.
This bill was introduced on December 6, 2007 and reported out of the Retiree Health Care Reforms Committee on December 13, 2007. There has been no action on the bill since its being reported out, although there have been a number of discussions and meetings with various groups by the members of the Committee which is chaired by Representative Mark Meadows.
Our organization has opposed the bill since its introduction and we have so testified two times before the Health Care Reforms Committee. We continue to oppose the bill for the following reasons:
- It would destroy the linkage between active employee health care benefits and retiree health care benefits which is established by statute requiring joint approval of the plan by the Civil Service Commission and the Department of Management and Budget.
- Of equal importance, it would cause the continuity in health care plans to be lost when a state employee retires. Currently, there is no change in providers or other significant changes in health care coverage when an employee retires. This is in sharp contrast to the lack of continuity in coverage when a school employee retires and has his/her health plan administered by the Office of Retirement Services.
- It would create a completely new role for the State Employees Retirement Board which currently has no involvement in non-pension benefits for retired state employees. It is highly questionable whether the Board or the staff of the Board has the capacity or expertise to administer a health care benefit program for some 45,000 retired state employees and/or their beneficiaries. Again, the continuity in programs makes it much easier for the staff of the Civil Service Office of Employee Benefits to administer retiree benefits.
- It has been said that the Office of Retirement Services does a better job in cost savings programs. Through the Civil Service’s administration of health care benefits retirees health care cost containments have resulted in savings of more that $200 million in the past 5 years. Please refer to attached letter from Employee Benefits detailing those savings.
- The on-going dialogue that exist between SERA leadership and the staff of the Civil Service Commission regarding retiree health care issues is of high quality and works for the mutual benefit of both the Civil Service Staff and the retirees. Input is made by SERA on behalf of retirees concerning proposed changes in plans and after a given plan is adopted, SERA is prepared and able to explain the changes to it retiree members. Frequently, focus groups composed of retirees are used to make input regarding health care issues and printed material intended for retirees. The Office of Retirement Systems does not appear to be “user friendly” and it is believed that such input would not be sought or welcomed.
- The perception of “user friendliness” of the Office of Retirement Systems is well-founded. Many of our members have experienced difficulties getting timely responses from this Office on important matters. Delays in obtaining insurance forms after the death of a spouse or loved one have been experienced. It is well documented that it takes an inordinate amount of time for one to reach a SER’s staff person by telephone. Being put on hold for up to thirty-five minutes is not uncommon. Getting quick, responsive answers to questions regarding health care issues is vital to retirees. It is believed that this would be a serious shortcoming should HB 5545 pass.
In Summary, taking the above points in their totality, it would not be in the best interest of state retirees if HB 5545 were to pass. In fact, it would be to the detriment of retirees. It is for these reasons, that SERA opposes the passage of this legislation and requests that it be reconsidered.