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State employees association works to block changes to State Health Plan, retirement system

RALEIGH The pressure building for weeks between the state treasurer’s office and the state employees association erupted at a legislative hearing Tuesday.

It comes as the association zealously tries to protect nearly 700,000 current and retired state employees and teachers from significant changes to their health insurance coverage and pension system.

The changes in benefits are being considered by Treasurer Janet Cowell and lawmakers.

Mona Moon, the health plan’s interim director, told the House Insurance Committee that the legislation clarified the treasurer’s ability to implement wellness programs for state workers, such as surcharges and pilot programs designed to reduce coverage costs.

But the state employees association argued that the bill gives Cowell far-reaching unilateral power.

“This is significant,” said Ardis Watkins, a SEANC lobbyist. “This is a massive change.”

Watkins and Moon went back and forth trading dueling claims in response to lawmakers questions.

Moon told state lawmakers that the provision in House bill 232 wouldn’t lead to increases in state employee health insurance costs and any additional fees would need approval from the health plan’s governing board.

Much of the current debate focused on the surcharges approved in February by the State Health Plan’s trustees. Current and former state employees in the system’s more generous plan would pay a $20 a month surcharge for smoking, an additional $15 if they don’t choose a primary care doctor and $15 more if they fail to complete a health assessment.

For a single employee, noncompliance would triple premium costs, the association said, though if completed it could reduce monthly premiums.

Republican state Rep. Jeff Collins said such programs are necessary to cut state costs.

“The healthier our employees’ lifestyles become, the lower the lower the total program costs to run,” the Rocky Mount lawmaker said.

In the meantime, the association is looking at four different bills filed this session that propose changes to the $78 billion state retirement system run by the treasurer.

The discussion comes as state leaders consider a shift from a pension program to a defined-benefit system.

The treasurer’s office is pushing House Bill 381, which would limit an employee’s ability to increase their salaries in the final years before retirement and boost their pensions.

The measure also would eliminate the 10-year requirement for state workers hired after Aug. 1, 2011, to get vested in the retirement system, moving it back to five years.

The treasurer remains silent on one of the most controversial ideas: a minimum retirement age of 62 for state employees who started work on or after Aug. 1, 2011.

The provision is not in Cowell’s bill, but Collins, the House sponsor for the measure, said the idea remains on the table.

Frank: 919-829-4698
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