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Retiree-benefotsLegislative staff pitched a policy solution to lawmakers on Monday that could reduce the state’s $25.5 billion unfunded liability associated with the Retiree Health Benefit Fund by 11.8 percent, producing a larger cost savings than the Senate’s proposal to eliminate retiree health benefits for all teachers and state employees hired after January 1, 2016.

The fix? Shift some of the costs associated with providing fully funded retiree health plans to the federal government. Going that route would require all retirees to enroll in Medicare Advantage plans—and by doing so, retirees shouldn’t be expected to bear more out-of-pocket expenses and the state would save $64 million annually, reducing the total unfunded liability by about $3 billion.

The Senate, on the other hand, wants to address the unfunded liability by eliminating retiree health benefits for new hires beginning in 2016. Some say this option will unfairly shift more costs to the worker and could hurt recruitment efforts, while producing an estimated smaller cost savings of 10 percent as opposed to the 11.8 percent that would come with enrolling retirees into Medicare Advantage plans.

For the full story, head on over to our main site. And you can read the legislative report below.

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A few short lines in the 2015-17 Senate budget would eliminate state-paid health retirement benefits for teachers and state employees hired after January 1, 2016.

“This will negatively impact the state’s ability to recruit good, qualified folks,” said Richard Rogers, executive director of the North Carolina Retired Governmental Employees’ Association. “In the future, I don’t see folks sticking with state government for the long term or for a career.

Current law provides teachers and state employees with a paid health insurance plan for the duration of retirement. It’s a graduated system, said Rogers, so employees must work a certain number of years in order to receive the maximum benefit of a fully-paid health insurance plan.

The Senate budget provision, located deep in the biennial proposal that was released and passed by Senators this week, would affect teachers and state employees who join the workforce after January 1, 2016 by eliminating the health insurance benefit altogether.

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The provision also affects those who stop out of the workforce and withdraw their retirement benefits from the state system, then re-join the workforce after January 1, 2016. Those state employees would also forfeit their retiree health insurance benefits.

The retiree state health plan provides health care coverage to more than 685,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, state hospital staff and their dependents, according to the plan’s website.

The General Assembly is expected to spend the rest of the summer hammering out a final 2015-17 budget for the state. Stay tuned to see if the Senate’s proposal to axe retirement health benefits for teachers and state employees makes it past the cutting room floor.

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New from the N.C. State Health Plan website’s “newsroom”:

Eligibility Update Regarding Friday’s Ruling on Same Sex Marriages

A federal court has overturned North Carolina’s law regarding same gender marriage, recognizing same sex marriages as legal in North Carolina. This ruling now makes same sex spouses of State Health Plan members eligible for State Health Plan coverage.

This ruling is considered a qualifying life event and eligible spouses will have 30 days to add their spouse. A marriage certificate will be necessary to verify the spouse is an eligible member. The effective date of coverage will be November 1, 2014.

Beyond this initial 30 days, marriage is a qualifying life event and members will have 30 days to add a spouse to their health plan coverage.

Please see your Health Benefits Representative for assistance in enrolling an eligible spouse.

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Jack WalkerAccording to the State Health Plan website Jack W. Walker, PhD, “previously served as executive administrator from November 1999 to March 2005”. According to the NC Secretary of State’s Office, Jack W. Walker was also the President of “Benefit Plans of America, Inc.” a North Carolina Corporation, from September 1999 through December 2001.

Little is known about the NC corporation “Benefit Plans of America, Inc.” Walker’s wife Janice was a Director and Secretary/Treasurer. An annual report was filed April 2000. Another filed February 2001 was rejected. Articles of dissolution were filed January 2002. The firm is not listed in Walker’s online biography. By unfortunate coincidence another firm of the same name was operating in North Carolina during the same time period.

“Benefit Plans of America, Inc.” a Mississippi not for profit corporation was providing unlicensed dental insurance plans in North Carolina and was the subject of complaints to the NC Department of Insurance. It had used the name “Benefit Plans of America, Inc.” since June 1995 and in February 2004 was issued a Cease and Desist letter by the NC Department of Insurance.

There is no reason to believe that there is any connection between “Benefit Plans of America, Inc.” a North Carolina Corporation and “Benefit Plans of America, Inc.” a Mississippi not for profit corporation. The striking similarity of the names could lead a reasonable person to confuse them.

It is not unreasonable to ask why Walker maintained this corporation while serving as executive administrator of the State Health Plan. It is not unreasonable to ask why someone with responsibility for validating and reimbursing millions in State health care benefits could be oblivious to a dubious health benefits corporation with a name identical to his personal corporation.