63 Comments - PublicServant - Monday, Mar 4, 13 @ 12:20 pm: Will Maag be able to stay the imposition of these premiums? And, as others will undoubtedly ask, am I as a retiree that was never in a union, bound by their negotiations with the Quinn administration? - mythoughtis - Monday, Mar 4, 13 @ 12:26 pm: What about retirees that were already paying more than this due to having less than 20 years of service? - Bill - Monday, Mar 4, 13 @ 12:28 pm: PS, Without the union you’d be a lot worse off. There are non-union plaintiffs so even with this tentative agreement the court case may go on. Take the smaller hit now or take a much bigger one later. - BehindTheScenes - Monday, Mar 4, 13 @ 12:31 pm: I’m in the same boat as ‘PublicServant’… Never was in the union, don’t have a vote. Still wondering whatever happened to that sticky old constitutional thingy about ’shall not be diminished’. Premium-free healthcare was guaranteed to me upon retirement, and now there’s going to be a charge. If I’m not paying for it from my pension benefit, just where is that money to come from? - Reality Check - Monday, Mar 4, 13 @ 12:32 pm: @PublicServant, read the document Rich posted: “AFSCME continues to believe that the new retiree health care law is unconstitutional and will continue to advance the legal challenge to the law filed on behalf of AFSCME retiree plaintiffs.” - PublicServant - Monday, Mar 4, 13 @ 12:34 pm: Bill while that may be the case, my question still stands regarding Maag and my being bound to union negotiations. There is also no question that these charges will continually be revisited and increased, probably annually, in the future. I’ve got alternatives, and I’ll pursue them, if needed. - RNUG - Monday, Mar 4, 13 @ 12:39 pm: PublicServant I haven’t seen the actual language, just been told a summary. It’s my understanding that the actual retiree rates only apply if the State wins Maag. Adding my own spin, I think the State is hoping Maag gets tossed in a couple of weeks on their “unfounded” motion. At the end of the memo Rich linked to, AFSCME states it is continuing the (implied Maag) lawsuit; they are one of many parties to the combined suit. It’s also my understanding that CMS (or at least their lawyers) had previously agreed to notify the court before they would attempt to impose any retriee healthj insurance payments resulting from SB-1313/PA97-0695. Not sure if they would consider the union contract as applying but we might want to keep an eye on paperwork there. As far as retirees being bound, that’s whole issue and other lawsuit if someone decides to persue it … At this juncture, taking the AFSCME deal may be the best couse of action for the moment; at least it is predictable for the next two years and the “premium” portion is less than the COLA. - Mouthy - Monday, Mar 4, 13 @ 12:40 pm: If the Maag case fails for retirees then I, with a modest income will gladly accept the rates stated above for insurance, as long as they don’t mess with the COLA. The law is already on the books and I can’t see doing any better then this in the event of retirees’ failing to prevail in the Maag case. Yes, it’s a little haircut but it leaves the scalp…. - facts are stubborn things - Monday, Mar 4, 13 @ 12:46 pm: If a retiree opts out of the state offered health care plan — recieves $500 per month, would you have an option each “choice period” to reavaluate the decision? No mention, at this time, of the cost of more then 1 dependend. - rusty618 - Monday, Mar 4, 13 @ 12:46 pm: So what happens when this contract expires in July 2015? Will new insurance rates be negotiated in the next contract, and every one there after? - Norseman - Monday, Mar 4, 13 @ 12:51 pm: First, I believe that 1313 is an unconstitutional diminishment of benefits. Second, AFSCME doesn’t represent me. That being said, if this is accurate I think retirees could have faired worse. So folks, keep things in perspective before teeing off on AFSCME. - Raising Kane - Monday, Mar 4, 13 @ 12:58 pm: AFSCME deserves a big thank you from all of us, union or not. They fought back draconian cuts, insane montly premiums for retirees, the taking away of several paid holidays and somehow ended up with a raise. Houdini couldn’t have pulled that off. - facts are stubborn things - Monday, Mar 4, 13 @ 1:00 pm: rusty618 I beleive, if AFSCME pervails in the law suit, it will not matter. However; if the state prevails I would suspect it would continue to be a part of every negotiations for the forseeable future. - mid-level - Monday, Mar 4, 13 @ 1:04 pm: Would it be strange if the State wins Maag and the health care premiums on retirees increase yearly just about the same amount as the yearly COLA increase in pensions? - Chicago Cynic - Monday, Mar 4, 13 @ 1:16 pm: Is Illinois the only state with a constitutional non-diminishment clause? If so why did we get stuck with such a turkey? That and the prohibition on graduated income taxes are just befuddling to me. - Mouthy - Monday, Mar 4, 13 @ 1:19 pm: @- Chicago Cynic - Turkey to you, Saint Jude to me…. - Anon - Monday, Mar 4, 13 @ 1:41 pm: Why is the premium tied to a percentage and not a flat fee? Everyone is purchasing the same product. Why does the retiree with a 60k pension have to pay twice as much as a retiree with a 30k pension for the exact same service? - Six Degrees of Separation - Monday, Mar 4, 13 @ 1:44 pm: @Chicago Cynic - one of a handful, NY being the closest in language. - kimocat - Monday, Mar 4, 13 @ 2:02 pm: So, does this mean that retirees that are barely vested get the same subsidy as folks that put in 35 years??? - facts are stubborn things - Monday, Mar 4, 13 @ 2:04 pm: I think it is important to keep in mind that it is the GA and Quinn that took premium free healh care away from those with 20 years of service. AFSCME has joined a law suite to overturn that law and negotiated this rate which is much much better then what the state first proposed. I don’t understand exactly how AFSCME is negotiating for those retired, other then to say the state and afscme have agree to include it in negotiations and I certainly have no way of doing it myself. The alternative would be for CMS to set the rate period. - Leave a Light on George - Monday, Mar 4, 13 @ 2:06 pm: =Why is the premium tied to a percentage and not a flat fee? Everyone is purchasing the same product. Why does the retiree with a 60k pension have to pay twice as much as a retiree with a 30k pension for the exact same service?= I couldn’t agree more. Is the price any other product or service based on your income? - Endangered Moderate Species - Monday, Mar 4, 13 @ 2:12 pm: FDR stated, ” … The very nature and purposes of Government make it impossible for … officials … to bind the employer … The employer is the whole people, who speak by means of laws enacted by their representatives …” Whether you agree or disagree with the rights of public employees to unionize, it is difficult to disagree with the prophetic 1937 reasoning of FDR. - Joe M - Monday, Mar 4, 13 @ 2:12 pm: ==Is Illinois the only state with a constitutional non-diminishment clause?== I know that Arizona and New York has such a clause in their constitutions. In other states public employees have occasionally been able to have pension reduction law thrown out by the courts because of general contract law. Most states have a contract enforcement clause in their constitution or statutes. The U.S. Constitution also has a clause that says that no state shall pass a law which impairs the obligation of contracts. Although some jurisdictions still hold the view that a pension granted by public authorities is not a contractual obligation but is a gratuity, a majority of jurisdictions take the view that public employees have certain contractual rights in a public pension where a pension is part of the terms of employment. - facts are stubborn things - Monday, Mar 4, 13 @ 2:20 pm: kimocat Your point is taken. As you know, the law indicated that those with 20 years or more would have free health care premiums. So prvious law did not distinguish between someone with 20 years of service and someone with 35 years of service. Once that law was changed — ending free health care premiums — then the rate was set by negotiations tied strickly to size of pension which would be effected to some degree by years of service etc. I certainly understand your thinking. - RNUG - Monday, Mar 4, 13 @ 2:41 pm: Chicago Cynic Short version … IL copied the NY language - facts are stubborn things - Monday, Mar 4, 13 @ 2:48 pm: RNUG What is your take on the future of retiree premiums if the State prevails in the current law suite. Will AFSCME continue to negotiate the retiree premium each contract? How was the premium set for retirees before the 20 year free premium was established? - Bob - Monday, Mar 4, 13 @ 2:57 pm: If Maag wins, Current retirees are safe. But if ratified current AFSCME members, will have vote to Voluntarily to pay health insurance when they retiree. Current AFSCME members will have a choice if they want to pay health care cost after retirement! They have a choice, the state didn’t take anything!!! - steve schnorf - Monday, Mar 4, 13 @ 2:58 pm: anon, George-go back and re-read the Mayflower Compact for your answer - facts are stubborn things - Monday, Mar 4, 13 @ 3:05 pm: Bob Is it your position — help me to understand what you are trying to explain — that those current AFSCME members that vote to accept the contract are giving up their right to free premiums even if the state looses the law suit? - facts are stubborn things - Monday, Mar 4, 13 @ 3:06 pm: Bob Should add assuming the contract is approved - kimocat - Monday, Mar 4, 13 @ 3:06 pm: facts are stubborn things — Before the 20 year requirement was instituted, all retirees got their health insurance premiums covered. And when the 20 year deal was struck, those already retired were grandfathered in even if they had less than 20 years. Wish they would treat this the same way. - Anonymous - Monday, Mar 4, 13 @ 3:19 pm: So a retiree dependent non-medicare age on MC as of July 2013, is to be $113…is this per each dependent the retiree may have? Or is this $113 first dependent and X? second dependent? - boat captain - Monday, Mar 4, 13 @ 3:24 pm: @kimocat-before the 20 year vestment was adopted you had to have eight years to be vested in the retirement system and have your health insurance premium paid. I don’t know when the eight years were started. That was before my state employment. - facts are stubborn things - Monday, Mar 4, 13 @ 3:38 pm: kimocat Thanks, so it seems like we are in rather unchartered waters when it comes to retiree health premiums being set. Do we know for sure how these premiums will be set after the end of this contract…assuming the law remains as it is. - RNUG - Monday, Mar 4, 13 @ 3:39 pm: facts are stubborn things My guess would be that AFSCME would continue that trend unless / until some retiree sued over their representation. I don’t know what they based the pre-8/20 year premium calculations on. I never had to deal with that situation because all the people I know stayed long enough for the “free” insurance. As far as the future of the retiree premiums / how high might they go, it’s anybody’s guess. But to give you an idea of where CMS seemed to want to go (I may be off a bit since this is from memory), the last “proposal” for the SERS retiree with a $40K - $75K income and 20+ years of service (somewhat above average for current retirees but close to the low end for a new retiree these days) was 55% of the State cost and for their spouse / dependent it was 95% of State cost. Translating that to dollars, for the Medicare eligible it was about $190 retiree and $330 (note, you were already paying about $90 for one dependent). For non-Medicare, that was $330 for the retiree and $570 for the dependent. For this year’s non-Medicare 2% to reach the same dollar amount, your pension would have to be about $114K. I’ll note that for lower pension ranges, the propsoed percentages were lower but they were still looking to get 20% - 25% minimum out of the long service retiree. Do I think the premiums will end up real high real quickly? Probably not. Do I think they will go up from the current 1%/2% 2%/4% ranges? Probably, especially since this translates straight to current budget year savings in GRF. Whatever you think about ACA/Obamacare, health insurance costs keep going up and, in my opinion, the ACA with all of it’s new non-paperwork reporting and mandates actually is making it more costly. So we’re all going to pay more, either in higher premiums, reduced coverage, much higher co-pays or a combination. To answer your “how high” question a bit differently, based on the current FY State budgeting only one-half of health insurance premiums, I’m going to guess it will be the State’s goal to eventually get the retirees, on average, up to paying one-half of the State’s health insurance cost. If this takes place over a gradual period of time with the increases lower than the 3% AAI, then it will be relatively painless to the retiree. Doesn’t mean I necessarily agree with it, but that’s my slant on it. And just remember my opinion is worth about the same cost as the electricity for the pixels displaying it. - facts are stubborn things - Monday, Mar 4, 13 @ 3:42 pm: boat captain When it took 8 years to be vested and obtain free premium healh care, was there formula (5% per year) such as it was when it was 20 years. What I am getting at is, did it use to be 8 years or more free premium and less then 8 years no health care? Trying to understand if retiree health care has ever been negotiated. Was it negotiated this time because the law required it, or more because the parties just agreed. - zatoichi - Monday, Mar 4, 13 @ 3:44 pm: AFSMCE fought back insane monthly premiums? Who do you think pays the real costs of those premiums? A percentage of annuity is nice vague number that says nothing. At our place monthly non-Medicare PPO = $1,209emp/$2,296spouse HMO = $981emp/$1,864spouse HSA = $776emp/$1,474spouse Company pays about $450 toward emp. I pay 100% of the rest. I have no doubt the state gets good rates by shear size alone. Still $58-$117 a month, what a deal! And they’re complaining its too high? - Onlooker72 - Monday, Mar 4, 13 @ 3:44 pm: Just an FYI AFSCME negotiates the cost of healthcare for the whole state. So it doesn’t matter if you were a union employee or not the AFSCME contract sets the cost for all state employees. - facts are stubborn things - Monday, Mar 4, 13 @ 3:45 pm: RNUG Thanks so much for the information. This certainly points to the absolute importance of keeping the 3% compounded COLA! - I know labor - Monday, Mar 4, 13 @ 3:58 pm: In the beginning i questioned AFSCME’s right to negotiate for any retiree. The state agreed to negotiate with AFSCME to set the rates as a result of the new law. If the state hadn’t agreed to this, then all retirees would be at the mercy, every year, to CMS. Get your head out of the sand and understand that this is the fairest game in town. Sue… And win proving that AFSCME doesn’t represent you… Now you have no one but the state. And I am sure they would negotiate with u to set a fair rate. Henry Bayer deserves praise and support for this…. And the state finally showed some common sense in doing this. - boat captain - Monday, Mar 4, 13 @ 4:07 pm: @facts-Don’t know how they calculated it or when the eight year thing took effect. I remember when they changed it to 20 years. I think around 1985 but am not sure of that. That was the first I know of it to be negotiated. If you quit state employment before you had your eight years in you could draw your retirement money out of the system but had no health insurance. Many people I knew then just worked for the state for eight years to get the free health insurance benefit. - Jechislo - Monday, Mar 4, 13 @ 4:13 pm: Another question, if a “Medicare” retiree wishes to opt out of the state plan and join another health care plan, do they get a subsidy? I know it wouldn’t be $500.00 but it should be something. That would allow Medicare retirees to look for a Medicare supplement for them and their spouse elsewhere and not use the State supplement - which is what QCHP becomes after one gets on Medicare. - RNUG - Monday, Mar 4, 13 @ 4:20 pm: Jechislo Once you are on Medicare you don’t have to be on QCHP. You can chose any of the PPO’s and HMO’s. And guess what, most those pesky PPO / HMO rules don’t apply because they are the secondary carrier. - Kathryn - Monday, Mar 4, 13 @ 4:24 pm: Why is healthcare premiums based on a retirees’ pension amount? Medical providers do not ask how much you make before they bill you for an MRI or any other medical test. Employees that have continued their education,have taken on more responsibility and risks at work, have given up salary increases to be supervisors,are going to get penalized by having to pay more for insurance. Pension income should have nothing to do with how much we pay for healthcare. Here is just another disincentive for trying to better yourself in life. Hopefully the Maag lawsuit will make these premiums irrelevant. - OldIllini - Monday, Mar 4, 13 @ 4:30 pm: ==Why is the premium tied to a percentage and not a flat fee? Everyone is purchasing the same product. Why does the retiree with a 60k pension have to pay twice as much as a retiree with a 30k pension for the exact same service?= I couldn’t agree more. Is the price any other product or service based on your income?== Medicare premiums are flat, but then go up for higher benefit levels. So yes, price is based on income. - Ruby - Monday, Mar 4, 13 @ 4:33 pm: “Why is healthcare premiums based on a retirees’ pension amount?” Kathryn @ 4:24 pm It is because of the extremely high cost of health care insurance that we must consider a sliding scale for insurance premiums. There is nothing fair about outrageous medical costs that the American people must pay. - Jechislo - Monday, Mar 4, 13 @ 4:41 pm: “Once you are on Medicare you don’t have to be on QCHP. You can chose any of the PPO’s and HMO’s. And guess what, most those pesky PPO / HMO rules don’t apply because they are the secondary carrier.” I understand that. But if I choose to remove myself as a retiree from the health system (and they are paying a $500 subsidy to a non-Medicare retiree), I would expect a similar subsidy if the State is no longer providing insurance for me or my spouse. - Sir Reel - Monday, Mar 4, 13 @ 4:49 pm: Some of the pension proposals under consideration would change the COLA. This retiree health insurance deal doesn’t mean the GA couldn’t also reduce/eliminate the COLA through a pension fix. As a recently retired, formerly non-union State employee, I was looking forward to my first raise in years - my annual pension COLA increase. Now that meager hope may be dashed and I’ll have to pay for health insurance. Only in Illinois. - Anonymous - Monday, Mar 4, 13 @ 4:49 pm: So a retiree dependent non-medicare age on MC as of July 2013, is to be $113…is this per each dependent - vitaman - Monday, Mar 4, 13 @ 4:52 pm: OK so it looks like if my wife is SURS at 30K and I am SERS at 60K, I drop my coverage go on hers and make an extra $190.00 per month! - Jechislo - Monday, Mar 4, 13 @ 4:59 pm: Vitaman - Right, and get a $500 subsidy for doing it? - vitaman - Monday, Mar 4, 13 @ 5:05 pm: 500 - 249 = 251 251- 60 = 191 - Themistocles - Monday, Mar 4, 13 @ 5:15 pm: Hate to rain on y’all’s parades, but: 1. By what right does AFSCME “bargain” on behalf of retirees who aren’t part of the bargaining unit? And, by what rule of law does the State have to keep such a bargain? According to the Attorny General at the arguments a couple weeks ago in the Maag case (I was there), AFSCME has NO right to represent retirees. Does the AG talk to Quinn? 2. In any event, how can AFSCME, even in principle, bargain away a constitutional right of people who aren’t even members of the bargaining unit? 3. Once ASFCME admits that it’s OK for retirees to pay 2% of their pensions in violation of the Contracts Clause, what’s to stop the State from making it 20% in the next negotiation, and 50% in the negotiation after that? - capncrunch - Monday, Mar 4, 13 @ 5:20 pm: “Is the price any other product or service based on your income?” Only if it is provided by some level of government. Probably shouldn’t means test this premium, however,- it might have bad effects on the self esteem of those who don’t have to pay as much. That’s the reason given for not means testing Social Security and Medicare Part A benefits. - Tsavo - Monday, Mar 4, 13 @ 5:21 pm: SERS Retirees ONLY (Public Act 94-0109) Effective January 1, 2006, Non-Medicare SERS Retirees who provide proof of other comprehensive medical coverage will be allowed to Opt Out of the health, dental and vision coverage provided by the State of Illinois Insurance Program and receive financial incentive payment of $150.00 per month (you will continue to have your basic life coverage, as well as any optional life coverage in which you are currently enrolled). To qualify for this Financial Incentive Program, a retiree must be non-Medicare and able to provide proof of enrollment in another health benefit plan, either comprehensive major medical or comprehensive managed care, from a source other than the Illinois Department of Central Management Services (DCMS). Other health programs under DCMS include the Local Government Health Plan, Teachers’ Retirement Insurance Program and the College Insurance Program. If you choose to Opt Out and receive the financial incentive, you cannot enroll as a dependent of a state employed or retired spouse under the State of Illinois Group Insurance Program. - Tsavo - Monday, Mar 4, 13 @ 5:23 pm: Q: If my spouse and I are both members, can one of us become a dependent on the other’s state insurance plan? A: You can remain a dependent at the time of retirement if you have been a dependent on your state retired or state employed spouse s insurance for one year. If you are an active employee and retire immediately from active employment with the state, you cannot becomea dependent of your spouse. - vitaman - Monday, Mar 4, 13 @ 5:25 pm: Tsavo, Thanks and I remembered that PA but the question remains will the PA apply to the new contract? - Leave a Light on George - Monday, Mar 4, 13 @ 6:18 pm: According to Steve Schnorf the answers to all our questions are in the Magna Carta. - Mix_It_Up - Monday, Mar 4, 13 @ 6:19 pm: Such a case was settled by the California Supreme Court: http://www.calpersresponds.com/issues.php/supreme-court-health - RNUG - Monday, Mar 4, 13 @ 6:47 pm: vitaman, there’s already a rule against that if you are both state retirees … - RNUG - Tuesday, Mar 5, 13 @ 12:30 am: Sir Reel, Changing the COLA is going to be a much higher constitutional hurdle, especially because there are IL cases already saying it is protected. And if you read the 1970 Con-Con debates, it is clear it was the intention of the diminishment clause authors to protect not only the pension but also any COLA. Some of those authors have testified in previous courts cases as to that intent, so it is a factual matter of record. - Ano - Tuesday, Mar 5, 13 @ 5:22 pm: What about Public Act 91-0395? - Anne - Friday, Mar 8, 13 @ 9:12 am: I’m an IL state retiree and feel that this agreement is a tribute to the union that negotiated it. I don’t think a lot of the commentors know how reasonable this is compared to the private sector or compared to other states’ retirees. So be glad for what you have. Sorry, comments for this post are now closed.