Will paid health insurance for retired teachers eventually go away? Can state afford to maintain benefit?
With all the DeKalb news, I apologize for not getting to House Bill 263 — a bill requiring that retired educators in the future pick up their own healthcare costs — earlier this session since so many of you wrote to alert me to it.
The bill states: A BILL to be entitled an Act to amend Subpart 1 of Part 6 of Article 17 of Chapter 2 of Title 20 of the O.C.G.A., relating to school personnel post-employment health benefit fund, so as to provide that any person who becomes eligible to participate in such fund on or after July 1, 2013, shall pay a premium which reflects the entire cost of such coverage; to prohibit the expenditure of public funds to subsidize the cost of health care; to provide for persons currently eligible; to amend Part 2 of Article 1 of Chapter 18 of Title 45 of the O.C.G.A., relating to the state employees post-employment health benefit fund, so as to provide that any person who becomes eligible to participate in such fund on or after July 1, 2013, shall pay a premium which reflects the entire cost of such coverage; to repeal conflicting laws; and for other purposes.
I am not the only person who heard a lot about the bill, which is unlikely to advance this year.
“I guess I received more telephone calls about HB 263 than any other this year, so I went and talked to the author, Rep. Chuck Martin, about it,” said Herb Garrett of the Georgia Superintendents Association.
According to Garrett:
The content of the bill was extremely difficult to decipher, and it certainly led a lot people to believe that it would mandate that all retirees pay the full cost of their health insurance (no state funds to pay the employer’s share). Rep. Martin made it quite clear to me that he had no intention of his bill affecting any current teacher or current retiree; rather, he intended that the provisions of the bill only apply to newly hired teachers (those employed after July 1, 2013) and only at their time of retirement (30 years away). All the additional language about how the provisions of the bill might apply to educators who had a “break in service” were also quite confusing, and Rep. Martin agreed that the section containing that language needed a major rewrite.
Now, I don’t think he ever thought the bill would gain much traction, and he’s right. Rep. Martin does feel very strongly, though, that a conversation needs to begin about the financial obligation that the state has to continue to furnish the employer’s share of health insurance for retirees while, at the same time, they have put absolutely no money aside to do it.
For the uninitiated, this is referred to as a government’s OPEB (Other Post-retirement Employee Benefits) responsibilities, and the Governmental Accounting Standards Board has for years required governmental agencies, both state and local, to either put aside money to cover those benefits or make a public declaration that they are aware of them (but, are not putting money aside at this time). Georgia started to put some OPEB dollars away a few years ago (I think they socked away $100 million one year.), but the very next year they used that money for something else (Imagine that!), and the OPEB fund balance stands at zero. Rep. Martin views this as a serious abdication of the state’s responsibilities, and he thinks the issue ought to be addressed. That’s what HB 263 was actually all about.
“To his credit, the sponsor sheds light on a real problem — Georgia isn’t properly funding post retirement health insurance benefits for public employees. However, we disagree with the approach taken in this proposed solution to the problem,” said Tim Callahan of the Professional Association of Georgia Educators. “At a time when our state is struggling to attract the best and brightest to the teaching profession–particularly in STEM fields in which young employees could make more in private industry — eliminating an attractive benefit sends a contradictory message about how state policymakers value the teaching profession.”
I asked Martin for a comment on his bill and he explained:
First, the bill on the web has a serious defect in that is says the state employees, including teachers, hired after July 1, 2013 would have to pay for the entire cost of the health insurance while “active” and in retirement – this was never the intent of the bill but instead a drafting error.
The intent of the bill as it was meant to be drafted was to have state employees, including teachers, hired after July 1, 2013, to pay for the full cost of their healthcare in retirement when they become eligible as currently defined in the system because, in my opinion, continuing to add people to an underfunded system endangers those currently in the system.
The bill raises issues that are worth discussing. Among the many emails and letters on House Bill 263:
<blockquote>I checked to see if your paper had written anything concerning HB 263 and found nothing. It is obvious that this bill will ensure that only the least talented educators will seek employment in Georgia. I foresee a time soon if this bill is passed that Georgia will have the lowest educational rankings in the United States. Could you please research this situation and write an article about it?</blockquote>
–From Maureen Downey, for the AJC Get Schooled blog
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164 comments Add your comment
bootney farnsworth
March 8th, 2013
2:28 pm
@ OP
you’re right -I stand corrected. I’m in the same boat.
I just don’t trust the state one iota not to raid us at some point, or at least try to.
bootney farnsworth
March 8th, 2013
2:41 pm
@ maureen,
earlier I asked you, openly, if I can start hitting 10:10 back the way that troll deserves.
I’m a big kid, I can handle the criticism my commentary merits. I take strong stands, and I understand the quid pro quo a strong stand requires. but I have grown exceptionally weary of the direct grade school attacks 10:10 makes on people, not their posts, on a daily basis.
I recognize a schoolyard bully -10:10- when I see one. the sort of intellectual coward who throws personal barbs with no attempt to deal with content. then hiding behind the skirts of whoever is in power.
something which is different about me than most is I don’t shy away from punching the bully in the nose when deserved, even if the principal will suspend me for it.
out of respect for the overall community I have restrained from going full boar with this clown. but I’m out of patience with this. so I’m asking once again:
either please reign this clown in, or give me permission to deal with him as he deserves.
Mary Elizabeth
March 8th, 2013
2:46 pm
Let me highlight one sentence from Original Prof’s 1:18 p.m. post:
——————————————————————————-
“$1.1 billion has been cut from the SHBP funding during FY 2008, FY 2009 and 10 months of FY 1010.”
——————————————————————————
That number ($1.1 billion dollars) is a staggering amount of money to be cut from the funds of the SHBP for just under three years of time. That was during the same period of time that retired teachers (and other retired state employees) were switched – without having a voice in the process even though they paid the premiums for their medical care – from traditional Medicare, in which the SHBP paid the other 20% cost for claims that traditional Medicare does not cover, to Medicare Advantage, a nationally Republican-touted plan.
A few months after this change occurred when I had called the SHBP to inquire about it, a representative of the SHBP told me that there might come a time in the future in which it would be more advantageous for state retirees to leave the SHBP, return to traditional Medicare, and find their own supplemental carrier for the 20% cost for claims not covered by traditional Medicare.
It seems to me that removing state retirees from the SHBP has been the intention of the leaders in the Republican government of this state, and the leaders of the SHBP, since Georgia has returned to electing Republican governors. Shame on Georgia’s SHBP for deserting your long-standing previous promise to retired state employees – because of your commitment to an extreme Libertarian ideology that benefits the very wealthy and powerful of this state and nation at the expense of the hard-working, and even dedicated, public servants, in their old age, no less.
Young teachers, I think it is time for you to begin the process of securing a real teacher’s union in the state of Georgia. It is, also, time to re-elect a Democratic governor and Democratic legislators who will demonstrate that they support public education in this state, and that they respect and support Georgia’s public school teachers.
Pride and Joy
March 8th, 2013
4:36 pm
YOu know it’s funny. Whenever “educators” complain about their salary, we in the know point out those great benefits teachers get and teachers blow them off as not important…until they are threatened to take them away that is.
Health care is enormously expensive.
J8ust for me alone, I pay 650 a month. JUST FOR ME, not including my kids. There is no retirement health care. WHen I become too old and frail to work, medicare is my only option along with whatever I have saved out of my pocket.
So, teachers, when you are beeching and moaning about that low salary of yours — consider that you have paid healthcare when you retire. This benefit is enormously expensive and absolutely valuable.
You can’t have your cake, eat it all and then whine about the calories making you fat.
You have enormously great benefits and you need to stop whiiiiiiiinnnnnniuiuuuuubng,
OriginalProf
March 8th, 2013
5:48 pm
@ Pride and Joy. I agree with you that “healthcare is enormously expensive,” especially when you’re elderly and retired. That’s why public school teachers and their schools were willing to make monthly payments into their HBSP for decades to be sure that they would be covered. THEIR OWN MONEY. It is not whining to complain greatly when the state takes away that money, uses it for their own purposes, and then the retired teachers don’t have what they were paying when they need it.
THEY paid for their retirement healthcare in advance. So stop whining about “paying $650 a month,” when you didn’t have to pay in advance for it.
Private Citizen
March 8th, 2013
7:31 pm
Original Prof, maybe you’ll check the thread and read this. For being a prof, you’re a little coarse. Yes, that is my money, too, and I have been fired from no teaching gig and suffer no demerit. But for me, yes I have stepped back and a good thing it is for me right now for several reasons, one being I can not in good personal conscience perform “Race to the Top” and play along. I’m just not there in my outlook and there is a limit of what I will do to the kids, as opposed to for the kids.
My overall point is we need to move toward universal healthcare.
Good luck digesting that concept. You seem to put you membership in the craft a little ahead of pure philosophy. That is one difference in you and I. PS You should not make comments about people being fired. It is highly uncool. I work my hours, maybe more than you. I attain my performance goals. Who know what else in the hell is going on. There’s a lot going on and much of it is gamesmanship and the same old belongers whacking the shuffleboard and screwing other people around. I’m really sick of the character quality of many of my colleagues, quick to put the comfort of their own butt in front of everyone else. Well, I’m not like that. Maybe you’ll go to sleep and have a dream and it will all become clear to you.
Private Citizen
March 8th, 2013
7:41 pm
PS Original Prof, my idea of a health care plan is like when the doctor was summoned to see Emily Dickinson and she came to the upstairs bannister, looked down at the doctor, and then turned away, refusing to grant him an audience.
I don’t even like going to the doctor. It is such an insulting rip-off no matter who is paying for it. If I ever get so sick that it matters, just bury me. Although in my family the tradition is cremation. Sir, I am aware of the conditions in this country, and I live in those conditions.
Private Citizen
March 8th, 2013
7:47 pm
My high school friend’s dad just got some of that high-falluting healthcare. They replaced two valves in his heart. Then they put him on dialysis. He never woke up. The funeral is this week.
Private Citizen
March 8th, 2013
7:53 pm
You can buy a good bicycle for $650., although you don’t need twelve of them in a year.
I recommend eating a lot of carrots. There is a difference in quality of carrots, if you care to notice. The good ones have much vitality, available at only one high end “market” store where I live. I bend over as much as possible; you can’t buy limberness. School teaching can kill you, standing all day and never bending over. I moved a thousand bricks last week, completely enjoyable, six or seven at a time. Lots of bending, picking them up and setting them down.
AJC isn't me
March 9th, 2013
12:08 pm
@bootney – By the way, “reign” is what Elizabeth II does in the UK. Not at all the word you mean. And you DO post w-a-a-y too much!
OriginalProf
March 9th, 2013
7:42 pm
I’ve been curious to understand what happened to SHBP’s reserves in 2009 that led to its 2012 bankruptcy. My sources here are the AJC, Atlanta Progressive News, and Creative Loafing. SHBP is more than 50 years old, begun in 1962. As with the state’s policemen and firemen, its public teachers have always been promised that although their salaries would be modest, their retirement pensions and healthcare would be guaranteed.
As explained above, the state government’s OPEB responsibilities for years have required that state and local agencies put aside money to cover SHBP’s retirement healthcare benefits. But from 2008-2010, the state only set aside 4% of its healthcare retirement benefits liability. In 2008 and 2009 as the recession spread, the governor and Legislature approved reductions in the amount that state agencies and the Board of Education were required to contribute into the fund.
In 2009 the state had a $2 billion shortfall in tax revenues. The General Assembly made $1 billion in budget cuts; and in March the AJC reported that the state’s budget plans would probably deplete the reserve fund for the SHBP by June of 2010. Perdue dipped into the state’s own reserve funds: he took $50 million in 2009 and $408 million in 2010. He also took most of the millions that SHBP had in its reserves. ALL of these reserve funds were put into the state’s general fund, including what the teachers had been putting aside in SHBP for all those years.
And once the state had found this source of money in the SHBP reserves, they just kept on taking it. They didn’t fund the SHBP either.
And that is how Georgia broke its long-held word of honor that it had given to at least five decades of public school teachers when they were employed.
southside teacher
March 9th, 2013
9:17 pm
Once again, public employees are presented as a drain on society, a bunch of lazy do=nothings on the state payroll. Not to be confused with the other such group whom we elected for that role.
What gets left out of the conversation, time and time again, is the FACT that these retiree-benefit obligations were AGREED TO by the public authority in question, with the expectation that said benefits woulf be appropriately FUNDED. Instead of fulfilling that responsibility, our public authorities have repeatedly and consistently NEGLECTED their fiduciary duty, in BREACH of the AGREEMENT they made. After the fact, once it is too late to rectify the problem, they shift the burden to the employees who relied upon the public employer’s PROMISES.
Tell me, who exactly created this problem? and please remember, Georgia is a right-to-work state; that means NO UNIONS.
mabia
March 17th, 2013
10:13 am
Thank you for the inspiring reporting and beautiful photos! I have a question: how do the
mothers arrange their clothing to breastfeed so discreetly? I ask because here in the UK
some immigrant mothers find it hard to wear their traditional clothes and also feed the
baby – especially if they wear the shalwar kameez. I’m amazed because they must have been
designed for breastfeeding – but it seems the latest fashions are for a tight fitting,
long tunic. The shawl part of the sari looks very practical – but what do they wear
underneath and what options are there? Many thanks for any light you can shine on this!
Washington State
March 27th, 2013
9:42 pm
We had no idea any state was providing healthcare for retired teachers. How wonderful. I have just retired in Washington State spending 37 years in middle school. My healthcare eats 1/3 of my retirement check each month. Only administrators get healthcare paid at retirement.