Retirees Strongly Urge Legislature to Roll Back Unfair Health Insurance Increases – Cite Lack of Transparency

Question Tax Free START-UP NY Program While Retiree Benefits are Cut

ALBANY, NY (02/27/2015)(readMedia)-- Testifying before the Joint Fiscal Committees hearing on Governor Cuomo's Executive Budget, Edward C. Farrell, Executive Director of the Retired Public Employees Association (RPEA), called upon the legislature to correct the inequities which have been forced upon state and local retirees.

Farrell stated, "We find it bizarre that New York State is offering ten years of tax breaks to companies and employees who move here while at the same time reducing benefits to retirees who spent their entire career meeting the needs of the people of New York. What is wrong with this picture?"

The Problem

  • In 2011 the State of New York and CSEA signed a contract to increase the percentage of health insurance premiums paid in exchange for a "no lay-off" provision.
  • The state then administratively imposed the same increase to current retirees participating in the New York State Health Insurance Program (NYSHIP).
  • Retirees had no representation in the negotiation.

Farrell stated, "Retirees had no role in bargaining for that contract and it makes no sense to extend its provisions on us. When the prior increase in the contribution percent for health insurance was enacted, it was prospective in nature and applied only to workers who retired after it became effective. It is like a new tier in the retirement system – it applies only to new employees.

"The increase was slipped into the bill approving the CSEA contract. The bill, which was passed at the end of session with a "Message of Necessity", amounts to chicanery and should be rolled back. This is a $30 million annual hit on retirees and is a further example of what's wrong with how Albany operates – a lack of transparency".

Farrell further noted, "The state realizes savings in the billions by requiring participants in NYSHIP to enter Medicare upon reaching age sixty-five, while still paying the same insurance premiums as active employees. The Department of Civil Service has taken the position that it does not have the statutory authority to reimburse certain costs associated with the relatively new prescription drug component under Medicare. Now is the time to correct this situation which is costing retirees $500,000 annually".

Economic Impact of Retirees

There are more than 400,000 retirees of the New York State and Local Retirement System, eighty percent of whom remain in the state. Annually, these retirees generate more than $11 billion in economic activity in New York, pay $1.5 billion in real property taxes, and nearly $500 million in sales tax, according to the State Comptroller.