Testimony by Mark DelloRusso President, SEIU Local 888 Regarding, "An Act Providing Retiree Healthcare Benefits Reform"

(House Bill 59) Before the Commonwealth's Joint Committee on Public Service, October 31, 2013 My name is Mark DelloRusso and I am the president of SEIU Local 888. Our union unites thousands of state, municipal and higher education employees who provide vital public services to the citizens of the Commonwealth. The vast majority of our members will be impacted by this proposed retiree health care bill. Up until I retired last year, I was a state employee for the Lottery for 34 years, so I know just how important these benefits are to public service workers. State and municipal workers have been very engaged with the Governor and the Legislature to address the problems of long-term stability, affordability, security, and the availability of this benefit for retirees now and into the future. We recognize that the problems with the long-term financing of state and municipal retirees' health insurance benefits are real, and we are firmly committed to be part of the solution. This bill has many long overdue protections that provide a basic level of fairness for municipal workers. For example, it freezes retiree premium contribution rates at levels in effect last January for three years - thus blocking cities and towns from going to 50/50 contributions. And following the three-year moratorium, any municipality seeking to reduce its contributions must grandfather existing retirees at their current contribution rate. All future surviving spouses, and current surviving spouses who are enrolled in a municipal health plan, will be entitled to a minimum 50 percent employer premium contribution. But make no mistake; the solution to retiree health care costs should not come exclusively off the backs of retirees on fixed incomes. By shifting benefit costs from the state to future retirees, this bill could end up inadvertently punishing many workers who are just a year or two from retirement. As currently written, the bill penalizes workers who take a leave of absence for the birth of a child or the death of a loved one. It also unfairly cuts equally across all incomes -- which means retirees who earned lower wages while they were employed are now going to pay disproportionately higher costs. Many Local 888 members work in fields like higher education and health care. Their years of private sector experience bring valuable skills and expertise that are a major benefit for the public. To continue to attract and retain these experienced workers, state and municipal employers should not exclude them from receiving affordable retiree health care coverage. Finally, shifting a larger burden of retiree health insurance costs from the state to the individual does nothing to solve the problem of out-of-control health care costs that plagues Massachusetts more than any other state. While the state is in a strong position to address the problem of rising costs, individual workers and their families are in no position to do so. It's just plain wrong to ask future retirees to pay for all the savings -- without reforms or cost saving measures that similarly impact the insurance industry. This bill must be improved to ensure that insurance benefits are affordable and available in the future for all retirees. Without a parallel effort aimed at the insurance industry, public service workers will end up bearing the full burden for problems in the health care system. SEIU Local 888 unites more than 8,500 public service, higher education and not-for-profit workers in Massachusetts for the good jobs and quality services our communities need. Learn more at: www.seiu888.org.