Delaware General Assembly

Signed 5/2/11

The General Assembly has ended, the current status is the final status.

3/31/11

Longhurst

Reps. Hudson, Scott
Sen. Blevins, Bonini

Reps. Barbieri, Jaques, J. Johnson, Keeley, Mitchell, Schooley, Schwartzkopf, B. Short
Sen. Bushweller, Ennis, Henry, Sokola, Sorenson

AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO THE PUBLIC OFFICERS AND EMPLOYEES HEALTH CARE INSURANCE PROGRAM AND STATE EMPLOYEES PENSION PLAN.

SYNOPSIS Sections 1 and 2 of the Bill establish a fixed cost share effective July 1, 2012 for the different health insurance plans offered by the State for regular officers or employees of the State and their dependents, and a fixed cost share for pensioners and their dependents who are not eligible for federal Medicare. For the basic health care insurance plan, as set forth in Section 5203 of Title 29, the State will pay 96% of the total cost of the plan. For the Consumer-Directed Health plan, the State will pay 95% of the total cost of the plan. The State will pay 93.5% of the total cost of the HMO plan, and the State will pay 86.75% of the total cost of the PPO plan. The expected rate impact to eligible employees effective July 1, 2012 based on 2011 rates is as follows: This Bill eliminates the offer of a free plan, and as a result, a single employee in the State’s basic plan would now be paying approximately $20.58 per month, and an eligible employee enrolled in the family plan will be paying $53.23 per month. There are currently only 447 active employees and 132 retirees enrolled in the State’s basic plan. A single employee who is enrolled in the Blue Cross HMO Basic plan will be paying approximately $11.85 more per month, and a family in that same plan will be paying approximately $5.39 more per month. A single employee who is enrolled in the Aetna HMO plan will be paying approximately $12.26 more per month, and a family in that same plan will be paying approximately $9.42 more per month. Finally, a single employee who is enrolled in the PPO plan will be paying approximately $4.94 more per month, and a family in that same plan will be paying approximately $8.81 more per month. Section 3 of the Bill would require pensioners who retire after July 1, 2012 and who become eligible for Medicare to pay 5% of the Medicare supplement offered by the State. For each Medicare-eligible retiree or dependent who receives the Medicare supplement, the expected cost impact is approximately $20 per month. Section 4 of the Bill would change the number of years it takes for employees hired after January 1, 2007 to vest for the State share of retiree healthcare. Under current law, State employees vest for 50% of the State share at 10 years of service, 75% of the State share at 15 years of service, and 100% of the State share at 20 years of service. Pursuant to this Bill, employees who were hired on or after January 1, 2007 would vest for 50% of the State share at 15 years, 75% of the State share at 17.5 years of service, and 100% of the State share at 20 years of service. Section 5 of the Bill would eliminate double state share for new hires who are employed after December 31, 2011 as well as for current employees who become benefit eligible, and legally married after December 31, 2011. In addition, Section 5 establishes a $25 per month charge for current employees who are Double State Share eligible, effective July 1, 2012. Section 6 of the Bill would delete the reference to the “Standard 80” health care plan offered by Blue Cross Blue Shield, as the reference to the “Standard 80 plan” is an antiquated reference that is not indicative of the plan features provided for in the State’s basic health care plan. In addition, Section 6 would establish a floor of coverage the State will provide as mandated by federal law. Section 7 of the Bill would also delete an antiquated reference to the “Delaware 65” plan, which is no longer indicative of the supplemental Medicare coverage offered by the State. Section 8 of the Bill declares the intent of the General Assembly to prevent the limited abuse of the State Employee’s Pension Plan when employees voluntarily work overtime in order to inflate their final pension calculation. In addition, this Section recognizes that to protect the health and safety of employees and the citizens they serve, Agency management should also reasonably limit the assignment of mandatory overtime. This Section would require every Cabinet Secretary in each of the Executive Branch Agencies to devise a written policy by June 30, 2012 that would reasonably limit the use of mandatory and voluntary overtime. Section 9 of the Bill would redefine “final average compensation” such that for employees hired on or after January 1, 2012 overtime payments will no longer be included in the definition of “final average compensation”. Section 10 of the Bill differentiates employees for purposes of applying the State’s pension benefits: individuals first employed by the State before January 1, 2012, and individuals first employed by the State on or after January 1, 2012, who will be called “Post-2011 employees”. Section 11 of the Bill would change the normal retirement age for employees hired on or after January 1, 2012. Under current law, employees are eligible to retire at age 62 with five years of service, at age 60 with 15 years of service, or at any age with 30 years of service. Pursuant to this Bill, Post-2011 employees would be eligible to retire at age 65 with 10 years of service, at age 60 with 20 years of service, and at any age with 30 years of service. This Section would also increase the early retirement reduction factor for employees who retire prior to the normal retirement age as set forth above. Under current law, at age 55 and 15 years of service an employee may retire early, but the employee’s pension would be reduced by 2/10th of a percent for each month the employee is under the age of 60. Pursuant to this Bill, the employee’s pension would be reduced by 4/10th of a percent for each month the employee is under the age of 60. Section 12 of the Bill changes the number of years it takes employees hired on or after January 1, 2012 to vest for a pension, from 5 years to 10 years. Section 13 of the Bill would change the number of years it would take an elected official elected on or after January 1, 2012 to vest for a pension, from 5 years to 10 years. In addition this Section changes the normal retirement age for elected officials elected on or after January 1, 2012 to conform to the changes to the normal retirement age for employees referenced in Section 10 of the Bill. Section 14 of the Bill would increase the employee contribution to the Pension Fund from 3% to 5% of annual compensation after the first $6,000for employees hired on or after January 1, 2012.

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Takes effect upon being signed into law

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