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This article was supported by a State Legislature Reporting Grant from the Corporation for Public Broadcasting.
Delaware is considering sweeping changes to health benefits for current and retired state employees to address large unfunded liabilities.
The Retiree Health Benefits Advisory Subcommittee, chaired by Lt. Gov. Bethany Hall-Long, submitted final recommendations regarding future employers, including current retirees, to the Legislative Consolidated Health Committee earlier this week. The State Employee Benefits Board also met to consider options to soften the blow of a 27% increase in insurance rates for current state employees.
Liabilities for other post-employment benefits (primarily non-pension health benefits) are $8.9 billion, of which $8.4 billion is unfunded. Officials said if the issue is not resolved, net unfunded debt could rise to as much as $20.7 billion by 2042.
The RHAS subcommittee was created in 2023 in response to the State Employee Benefits Commission’s attempt to transition 25,000 retirees to Medicare Advantage plans through Highmark Delaware. Some people angered by the planned changes formed the advocacy group RiseDelaware and successfully sued the state to block implementation.
Superior Court Judge Calvin Scott temporarily put the state’s ruling on hold in October 2022, saying, “This court requires prior authorization for more than 1,000 procedures and uses only in-network physicians. “I do not agree with the opinion that benefits are at the same level as retirees.” Acquired under current policy. ”
The subcommittee made several recommendations, including eliminating Medicare Advantage plans. It also proposed increasing OPEB’s upfront funding from 0.36% of payroll to 0.5%, with an additional 0.25% increase each fiscal year thereafter until it reaches 10%. He also called on lawmakers to continue contributing 1% of the previous year’s general fund to the OPEB fund.
It also proposed changes to years of service and, accordingly, the percentage states pay for health insurance premiums for Medicare-eligible retirees hired after January 1, 2025.
“I want Delaware to be a place where people live, work, and raise families. And we want good state employees…It’s our roads, it’s our roads. Because it’s our schools. It’s our health care system, it’s every aspect of our daily lives,” Hall-Long said. “Businesses are influenced by how efficient our culture of excellence is.” [is] In our culture of status and excellence, we can only be as good as our people. It is necessary to secure funding. ”
