State employees hired after Jan. 1 will not be eligible for state employee health coverage if they work long enough for North Carolina to retire.
Eliminating state health insurance coverage for future retirees was part of the state budget passed in 2017 over the objections of the State Employees Association of North Carolina, the NC Association of Educators, and the N.C. Retired Governmental Employees’ Association. Leaders of those groups said cutting benefits would make it harder to hire correctional officers, teachers, and others to fill job vacancies.
The change will not affect people now working for the state.
Senate Republicans pushed for the change to make state employees’ retirement benefits similar to benefits private-sector employees receive.
In an interview Wednesday, Tamika Walker Kelly, president of the NC Association of Educators, said the change will make it hard to attract educators.
Tamika Walker Kelly
“It does make it harder to recruit younger millennial teachers into the profession,” she said.
Kelly said if she were a new teacher, accepting a job in 2021 it would be a hard decision knowing that teachers hired in 2020 have better retirement benefits.
NCAE wants to restore state retiree health care “so we can continue to draw the best and the brightest to the state of North Carolina and honor the years of service they are going to put in,” she said.
The lost health benefit will make it less likely that new employees will consider careers in government service, said Richard Rogers, executive director of the NC Retired Governmental Employees’ Association.
The change will make it more likely that people will work for the state for a short time to gain experience, then move on to higher-paying private-sector jobs, he said.
State Treasurer Dale Folwell
“A few years under your belt and off you go,” Rogers said. That happens now, but the lost retiree benefit will make it even harder for the state to retain quality employees, he said.
Rogers said there’s a chance the benefit will be restored.
“Give it a year or two,” he said. “It will come back up. We’ll have a harder time getting folks hired.”
State Treasurer Dale Folwell maintained in 2017 that the state employee health plan had billions in estimated future costs outpacing revenue.
In a statement Wednesday, Folwell said he didn’t know the change was in the budget and followed the law as it passed.
“Our focus has been on the IT implementation of the law, which had a nearly 3 year runway,” he wrote.
“I have not seen a fiscal note on the impact. For old and new employees, our focus is on maintaining the pension and healthcare plan for the next generation of public service workers.”