ISSUE IS INSURANCE
When you retire as an educator your insurance choices are few.
You can seek an individual plan but that is extremely expensive or you can remain in your local board of education plan and pay a "group rate". The group rate is the cost of your plan minus $1,300 per year. In 1987 the state said they would pay thirty-six dollars and seventy cents per month or a total of four hundred and thirty four dollars a year. Working teachers were required to pay seventy-three dollars and thirty cents per month for a total of one hundred and ten dollars a month = thirteen hundred per year.
That was twenty four years ago and the formula is the same today. But the state uses a percent to derive its funds from our teachers and there lies the problem. The percent is 1.25% of all of our Connecticut educators salaries. Every two years an audit is made of those funds. Last June 30, 2010 the total salaries exceeded $3.6 billion and 1.25% provided forty five million dollars. Now please remember we are the bright ones.
The cost of our insurance costs for our health plans is presently thirty million dollars for 2011. Leaving a surplus of fifteen million dollars which is put in the Health Insurance Account. That account is worth over one hundred and twenty million dollars. So we wrote our plan that would use $20,000,000 from our surplus each year to reduce the "Group Rate" costs by $2,000. There are 8,264 retirees under 65 years of age and about 1,500 retirees over 65 without Medicare.
Simply, we will use our own money to reduce our retirees "Group Rate" costs which is the purpose of the H.I.P.A. But our own insurance committee of the Association of Retired Teachers of Connecticut has failed to act.
Why? 1 haven't the slightest idea! Every year that the twenty million is taken from the Account would be replaced from the surplus funds and invested returns of our treasurer in the market place. Last year those returns obtained were 12.87%.
The C.E.A. has reintroduced Bill #5518 which over a two year period would cost our working educators at least nine million for each year as the 1.25% of gross salary assessment would go from this years $46,000,000 and add $18,000,000 to supply a slight increase of $7.35 or $14.20/month after two years.
Our plan would provide $2,000/year. Their plan would provide about $700 less/year then our plan while squeezing funds from our working educators. Please note that each years funds are taken that will add up to many thousands of dollars while state employees pay nothing for their retired colleagues insurance plans. When state employees retire they pay no group rate and the cost of the plan is about $250.00/year!
Now, who are the intelligent ones?
We will review our continued membership in ARTC and make our decision known very soon.
The next legislative budget is set for 2013. Can our retirees hold on, will our group rates stay the same.
Is this the best can do for our membership?
John Kane
President