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Wednesday, January 18, 2006

Ind. Law - Speaker says he does not have authority to change the plan for those already retired.

"Bosma said he doesn’t have the authority to change the plan for those already retired." That is a quote from a story by Niki Kelly today in the Fort Wayne Journal Gazette.

Perhaps not without changing the law. But he is not proposing to change the law, but apparently only the benefits plan he, as Speaker, administers for the House. As the story points out: "Future speakers could always change the benefit back." And would we even know?

In addition, according to the Journal Gazette story, Bosma will not close the door to full benefits for House members this term. The change will apply only to the 100 legislators elected or reelected on Nov. 7th, 2006.

That gives those who are eligible, meaning those current House members who have been elected for four or more terms, the opportunity to retire and take the lifetime benefit, worth over time maybe $240,000 for each retireee. Ironically, under Bosma's limited changes, they also will receive the benefit if they run and are defeated this year. From the Journal Gazette story:

The news fueled speculation throughout the Statehouse that dozens of House members would retire after this session to keep their benefit in place. That’s because Bosma’s decision doesn’t kick in until Nov. 8, the day after the next general election.
The story doesn't specify how many members are in at least their fourth term and thus would benefit from retiring this year. But later in the story is the statement: "[Rep. Jeff Espich, R-Uniondale] is one of seven [Fort Wayne] area House members who could remain eligible for the premium health care package if they don’t run again."

More from the story:

The subject has mostly bubbled under the surface for several years but gained attention when State Auditor Connie Nass recently sought money to conduct an actuarial study on the state’s unfunded liability, according to national accounting standards.

It became clear then that no one really knows what the extensive perk might cost taxpayers in the future. Garton told the Evansville Courier & Press this month that he has a study estimating the fiscal effect but declined to share results.

Both caucuses were behind closed doors late Tuesday afternoon discussing the issue, including rampant speculation that a number of members would retire. * * *

Rep. Ben GiaQuinta, D-Fort Wayne, said it bothers him that the benefit is being cut so drastically and he will have to think about the ramifications on his future.

But others definitively said they would stay, including Rep. Mike Ripley, R-Monroe. “If I were to jump ship, it would be a gold mine,” he said. “But I think the whole thing should never have happened in the first place.”

More:
Currently, 19 retired House members are using this plan. * * * Senate President Pro Tem Robert Garton, R-Columbus, elected the same benefit for his chamber in 2002, but he has not announced any changes. Only six former senators currently enjoy the benefit.
One more quote from this well-reported story:
Under Bosma’s change, those retiring after Nov. 7 can continue to participate in the state’s group health program but all premiums will be the retiree’s sole responsibility.

And if the House member is Medicare-age, the federal program must be the primary provider. This is the same as other state employees, who assume 100 percent of the costs upon retirement.

But according to the sketchy LSA fiscal note on Representative Troy Woodruff's HB 1309 (coauthored by Representative(s) Burton, Davis, Bright), it would take both administrative and legislative action to eliminate the health care perks. This section of the fiscal report makes me wonder whether Bosma can unilaterally eliminate the free Medicare complementary plan:
The bill also eliminates the statutory requirement that the Department of Personnel offer Medicare complementary insurance policies to retired state employees who become eligible for Medicare coverage. The statutory requirement is that at least two policies be offered: one providing medical coverage only, and the other providing medical coverage along with coverage for prescription drug benefits. As of November 2005, 14 individuals were enrolled in the Medicare complementary plans; 11 with medical coverage only and 3 with medical coverage plus prescription drug coverage. Although the statutory requirement to provide these policies is eliminated, elimination of the program will depend on administrative actions.
The Gary Post-Tribune has a story today by Steve Walsh prematurely headlined "Lawmakers lose free insurance." Some quotes:
A separate bill to repeal the plan by Rep. Troy Woodruff, R-Vincennes, calculated the plan is already expected to cost the state $306,000 a year by 2008, to pay the employee portion of the premiums of retired lawmakers, their families, surviving spouses and even divorced spouses. Woodruff had made the insurance give-away an embarrassing centerpiece of his campaign for the House in 2003.

As word spread of the impending decision, House lawmakers waited Tuesday for the policy to be released.

“I’m going to follow what the speaker does,” said Rep. Robert Kuzman, D-Crown Point.

Kuzman, an attorney, uses the state health insurance for his family. Current lawmakers have long been able to opt into one of a number of health insurance plans offered to state employees by paying the premium.

Since 2002, the speaker and the president pro tem of the Senate have had the right to grant retired lawmakers special status, which required the state to pick up their monthly premiums. The law forces the state to pay the employee portion of the state health insurance plan chosen by the lawmaker. It costs the state between $3,826 and $5,174 a year to pay the premium of an individual lawmaker, or between $10,711 and $14,511 a year if the lawmaker chooses a family plan, according to the nonpartisan Legislative Services Agency. * * *

House staff released information that the state is already paying the premiums for 19 retired House lawmakers. The speaker’s decision affects only the House. The policy was released early Tuesday evening, and there was no indication whether the Senate would follow and also end free insurance for its retirees. Senate President Pro Temp Robert Garton was not available for comment. * * *

Bosma said he hoped his policy would “establish a legacy” that would prevent future speakers from bringing back free health insurance.

Indianapolis Eyewitness News 13 has this AP story.

For earlier related ILB entries, select "Legislative Benefits" from the list of categories in the right column.

Posted by Marcia Oddi on January 18, 2006 07:04 AM
Posted to Indiana Government | Indiana Law | Legislative Benefits