Another Look at Anne Arundel’s Retiree Health Benefits

As reported in the Baltimore Sun, Anne Arundel County Executive Laura Neuman wrote a letter to workers saying the county needs to change how much it contributes to retiree health plans and how long it takes for employees to become eligible.  As described,

The county spends about $100 million annually on health care for current and retired employees, Neuman said. Recent projections show the county needs to set aside another $110 million annually for future health care costs.

If changes are not made, she said, retiree health care benefits for existing employees would be underfunded by $1.3 billion over 30 years — an amount she told employees equates to $2,400 for every resident in the county.

Last spring, as reported in the Capital-Gazette, the Anne Arundel County Council sought to reign in retiree health care benefits with legislation that would delay the vesting of retiree healthcare benefits.  According to the Capital-Gazette, in November 2012, voters overwhelmingly approved a charter amendment requiring the county to establish a trust fund for retiree health benefits, a measure that should cut the county’s liability by about half.

Governing magazine has featured stories from around the nation on the challenges of funding post-retirement health benefits.  As described in Retiree Health-Care Benefits: The Next Shoe to Drop?,

As of the end of fiscal 2012, many states’ OPEB unfunded liabilities are in the billions: California’s is more than $80 billion between its state, trial court and university system retirees; New Jersey reports a roughly $49 billion total unfunded liability for its retiree health benefits and Illinois’ State Employees Group Insurance plan reports more than $33 billion in unfunded liabilities.

For more information, see the full story from the Baltimore Sun, our previous posts on Conduit Street, Anne Arundel Council Challenges Rising Healthcare Costs and the full story from Governing.