March 26, 2013

AFSCME Negotiators Reduce Amount State Wanted Retirees to Pay for Health Care

FOR 15 months, the American Federation of State, County, and Municipal Employees (AFSCME) has negotiated with the Illinois Department of Central Management Services (CMS) over the amount of money retirees under the State Universities Retirement System (SURS) were to pay toward their health care benefits.

“LEGISLATORS OF both parties railed against ‘free’ health care for retirees, and last year—despite vigorous opposition from AFSCME—the General Assembly passed SB1313, which requires that retirees contribute toward the cost of their health care premiums,” said Henry Bayer, executive director, AFSCME Council 31.

“CONTRARY TO some erroneous media reports, the AFSCME Bargaining Committee did not ‘agree that retirees would contribute toward their premium costs,'” Bayer said, noting that the law passed by the General Assembly requires retirees to make premium contributions. “What the Bargaining Committee has done is to dramatically reduce the amount that retirees otherwise would have to pay,” Bayer said.

THE PROPOSALS that CMS wanted to impose would have required retirees to pay as much as 20% of their pension toward their health insurance. Under the CMS proposal, retiree premiums would have been set at $625 per month—more than $7,500 per year–for retirees with a covered spouse and a pension in the range of $35,000. Retirees in that range on Medicare would have had to pay $403 per month toward their State Health care premium. Individual coverage for a retiree in that pension range would have been set at $228 per month for those under 65 and $100 per month for those on Medicare.

UNDER THE agreement negotiated by AFSCME, a non-Medicare retiree with a pension annuity of $35,000 would pay $58 per month toward premiums beginning on July 1, 2013, then $117 per month beginning July 1, 2014. A Medicare-eligible retiree in that pension range would pay $29 per month in the first year and $58 per month in the second year of the contract. The premium for a Medicare-eligible dependent would be $89 per month in Managed Care and $142 per month in the Quality Care Health Plan--the same amount paid today.

THE NEW contract also includes increases in co-pays and deductibles for both active employees and retirees at well below the level that the CMS was seeking.

“I KNOW very well that any increase in health care costs will be burdensome to retirees living on fixed incomes, especially those with smaller pensions,” Bayer said. “That’s why the union fought so hard against efforts to drastically increase retiree health care costs. And thanks to the long, tough battle waged by the AFSCME Bargaining Committee, those costs will now be dramatically lower than the amounts that the State was planning to impose.”

FOR MORE information, call (312) 641-6060.

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