Employee Benefits and Relations

The 1-2-3 of Strong Pension Plans

Robin Clark Eilenberg County News

A recent article points to the fact that there are examples of well-managed public pension systems – and shares a few of their practices.

Bad press has blurred the fact that not all public pension plans are underfunded and overly generous. –Governing

Among the qualities of pension plans that are fiscally sound are:

  1. They provide moderate benefits and require cost analysis before any change in benefits;
  2. They provide retirement incomes of between 30 and 50% of an employee’s annual salary, not more; and
  3. They are supported by mandatory funding requirements in state law.

As described by Governing, beyond providing a good example for public pension plans that are struggling, these strong systems could even inform private sector efforts to expand retirement security.

For more information, see the full story from Governing, Pension Envy: Lessons From Well-Managed Plans.

End of Session Update: Employee Benefits and Relations

Employee Benefits and Relations , ,

A previous post provided the status of various employee benefit and relation bills that MACo took a position on. Now that the dust has settled, this post provides the final of these bills, which did not reach final passage until the last day.

Direct Deposit of Wages:  HB 233/SB 484 would authorize counties and municipal corporations to pay employees’ wages by direct deposit.  The House and Senate took differing approaches with these bills and a conference committee was appointed to resolve these differences.  MACo advocated for the Senate’s version of the bill, which prevailed, requiring direct deposit as a condition of employment and providing an opt-out for those individuals who do not have a bank account.  In addition, the bill grandfathered those jurisdictions that currently may require direct deposit through a collective bargaining agreement, personnel regulation or local law.  Status:   HB 233 passed both chambers and is awaiting the Governor’s signature.  SB 484 died in conference committee. MACo Testimony

Extended Unemployment Insurance Benefits:  HB 1228/SB 882 would provide an extended 13 weeks of unemployment insurance benefits to Maryland’s long-term unemployed who have exhausted all of their State and federal emergency unemployment benefits.  The Federal government is providing 100% funding for private employers, but the State and many local governments are self-insured and would be required to pay these benefits directly to any former employees who qualify. MACo expressed concerns with the fiscal effects of the bill.  Working with the Administration and members of the House and Senate Committees, a compromise was reached that would provide for local government reimbursement for a portion of costs associated with providing these benefits (see previous post).  Status:  Both bills passed the General Assembly and are awaiting the Governor’s signature. MACo Testimony

“Last Day” Issues Wrap Up

Leslie Velasco Education, Employee Benefits and Relations, Environment, Health and Human Services, Parks and Recreation, Planning and Zoning, Public Information and Ethics, Taxes and Revenues, Transportation and Public Works , , , , , , , ,

As reported yesterday by MACo, a number of issues with county effect remained in play prior to the midnight deadline for the General Assembly session.  Below is an overview of how each of those bills ultimately played out:

Maintenance of Effort – As reported yesterday, three bills were awaiting  final action. MACo supported HB 44 and SB 53 as a legislative initiative, to expand and balance the process for considering county MOE waiver requests —and both bills stalled in the Senate Budget and Taxation Committee. Status:  The bill that passed, HB 869,  delays the “penalty” for any county missing MOE but denied its waiver – withholding funds in the subsequent year, rather than the immediate year. The bill will become effective June 1, 2011.

Semiannual Payment Schedule for Business Property – HB 463, was amended by the Senate to apply to businesses with property taxes that do not exceed $100,000.  The House concurred with the amendments and the bill passed and will become effective October 1 and will apply to all taxable years beginning June 30, 2012.

Ambulance Service Providers and Assignment of Benefits SB 154, which would require health insurers to reimburse an ambulance provider (must be owned, operated, or under the jurisdiction of a political subdivision or a volunteer fire company or rescue squad) directly for covered services passed both chambers.

Public Access to Electronic Records:  HB 37 / SB 740 alters the State’s Public Information Act (PIA) to address the release of public documents in electronic format.  The bill will require the State and local governments to provide records in a searchable and analyzable electronic format where possible.  Governments have the authority to remove “metadata” before providing an electronic document.  MACo supported the bill.  Status:  SB 740 passed with a 2013 sunset that was added by the Senate.  The House initially rejected the addition of a termination date but later receded from its demand.  HB 37 did not pass.

Open Meetings Act Complaints:   HB 48, which was requested by the Open Meetings Compliance Board, sets a 1-year time limit for a person to bring an open meetings complaint before the Board.  It also requires local governments to post their meeting notices online and also physically post them at a publicly accessible location.  Finally, it repeals the requirement of a written notice.  MACo supported the bill.  Status: The Senate altered the 1-year time limit to 5 years but the House has rejected the Senate change.  The two sides were unable to resolve their differences and the bill failed.

Waste-To-Energy as Preferred Renewable Energy:  HB 1121 / SB 690 would move waste-to-energy from a Tier 2 source to a Tier 1 source (a more favorable position) within the State’s Renewable Energy Portfolio Standard.  MACo supported the bill.  Status:  The House amended the both HB 1121 and SB 690 to also include refuse-derived fuel as a Tier 1 source.  The Senate accepted the amendment and passed SB 690.  HB 1121 did not pass.

Funding for School Aid, School Construction and DDA Wait List – SB 994/HB 1213 increase the tax on the sale of alcohol from 6% to 9 %.  The bills are in slightly different posture.  SB 994 provides $15 million to fund the Developmental Disabilities Administration waiting list, while HB 1231 provides $47.5 million for school construction projects across the State.   As specified in the budget, funds from this revenue increase are also being used for additional school aid in Baltimore City and Allegany, Garrett, and Prince George’s Counties.

Uses of Local Program Open Space Funds SB 421 extends the recently expired practice of allowing a local government that has attained its POS land acquisition goals to use all of its POS funds on recreational facilities and projects.  MACo supported the bill.  Status:  The bill passed the Senate and encountered difficulties in the House.  MACo drafted amendments that specified that 25 percent of the funds could only be used for the following purposes:  (1) land acquisition; (2) repair or renovation of existing recreational facilities or structures; and (3) capital renewal projects (projects necessary to preserve the physical integrity of a facility or structure or to integrate two different phases of a phased-development project).  Both the House and the Senate passed the bill with the MACo amendments.

Unauthorized Signs on Highway Rights-of-Way:  HB 289/SB 410 would authorize removal of improperly placed signs on highway rights-of-way by state or local authorities, and authorize a civil action to recover costs of their removal or disposal.  MACo supported the bill because it would assist in the beautification of public roadways and provide reasonable authority for state and local governments to remove improperly placed signs.  Status: Both bills passed and will become effective October 1.

Towing Task Force Legislation: HB 356/SB 570 would implement the recommendations of the Task Force to Study Motor Vehicle Towing Practices. MACo raised concerns with language that stated that a motor vehicle towing and storage lienor may not sell the motor vehicle to which the lien is attached unless the lienor is licensed by the local jurisdiction.  MACo suggested that this language be amended to clarify that it only applies to those local jurisdictions that currently license towers, retaining the bill’s intended incentives, without a local mandate.  This amendment was not adopted.  Status: both bills died in conference committee on the last day of the session.

Motor Carrier Permits for Local Public Transportation Systems: HB 431/SB 402 would exempt a public transportation system established under the public laws of a county government or municipal corporation from the motor carrier permit required for a passenger motor vehicle used in the transportation of persons for hire.  Currently, local transportation systems are regulated by local government, the PSC, the MTA, and the Federal government depending upon the sources of funding used for operations.  MACo supported this bill to streamline and create efficiencies in the process.  MACo did however,  seek an amendment so the bill would also apply to local governments that entered into contractual arrangements with non-profit entities to manage and operate transportation systems on their behalf.  Status: SB 402 passed with MACo’s amendment and will become effective October 1.

Direct Deposit of Wages:  HB 233/SB 484 would authorize counties and municipal corporations to pay employees’ wages by direct deposit.  Status: The final version of the bill that passed (HB 233) would require direct deposit as a condition of employment and provide an opt-out for those individuals who do not have a bank account.  In addition, the bill was amended to grandfather those jurisdictions that currently may require direct deposit through a collective bargaining agreement, personnel regulation or local law.

Concussion Education and Treatment: HB 858 and SB 771 require school systems and youth sports programs to provide information about concussions to athletes, their parents or guardians, and coaches.  An athlete suspected of having a concussion or other head injury must be pulled from practice or play until cleared by a licensed health care provider.  MACo supported the bills with amendments that would clarify the bill’s notice and education requirements for local parks and recreation departments.  The amendments also clarify information that must be provided by youth sports programs when using school or local government-owned recreational facilities.  Status:  HB 858 and SB 771 were amended to become identical bills.  Both bills passed with the MACo amendments.

Session Update: Employee Benefits and Relations

Bill Hearing, Employee Benefits and Relations ,

This post summarizes the status of various employee benefits and relations bills that MACo took a position on.

Direct Deposit of Wages:  HB 233/SB 484 would authorize counties and municipal corporations to pay employees’ wages by direct deposit.  However, the House has taken an approach that would require direct deposit, unless the employee opts out.  The Senate’s approach would require direct deposit as a condition of employment and provide an opt-out for those individuals who do not have a bank account.  In addition, MACo sought an amendment to grandfather those jurisdictions that currently may require direct deposit through a collective bargaining agreement, personnel regulation or local law.  This language was amended into the HB 233 by the Senate, but the House did not concur.  The differences will need to be resolved  by a conference committee.  Status:   House conferees have been appointed for HB 233.  Senate conferees will be appointed tomorrow.  SB 484 has passed third reader in the House and will go the Senate for concurrence tomorrow.  MACo Testimony

Extended Unemployment Insurance Benefits:  HB 1228/SB 882 would provide an extended 13 weeks of unemployment insurance benefits to Maryland’s long-term unemployed who have exhausted all of their State and federal emergency unemployment benefits.  The Federal government is providing 100% funding for private employers, but the State and many local governments are self-insured and would be required to pay these benefits directly to any former employees who qualify. MACo expressed concerns with the fiscal effects of the bill.  Working with the Administration and members of the House and Senate Committees, a compromise was reached that would provide for local government reimbursement for a portion of costs associated with providing these benefits (see previous post).  Status:  Both bills are moving in the same  form through their respective chambers towards final passage.  MACo Testimony

MACo and Administration Reach Compromise on Extended Unemployment Benefits

Bill Hearing, Employee Benefits and Relations

The Administration’s bill ( HB 1228/SB 882) to accept federally-paid extended unemployment insurance benefits for private sector workers has raised concerns with the effect on public sector employers, who are self-insured and must pay for these benefits directly.   During the hearings on both bills, MACo and MML requested the opportunity to work with the Administration and the Committees to identify ways to help local governments accommodate these costs without putting new strains on local budgets.

Through discussions with the Administration, a compromise has been reached whereby $1.64 million would be set aside in an “Extended Benefits Fund” to reimburse counties and municipalities for a portion of their net costs associated with providing these benefits.  Net costs refers to the total extended benefits paid less tax revenue payable for providing these benefits.  Counties with a negative net cost would be reimbursed at a minimum of 60% of associated costs and municipalities with a negative net cost would be reimbursed at a minimum of 80% of associated costs.  Funds to reimburse the counties and municipalities would be generated through State tax revenues in excess of the direct costs to the State for extended employee benefit payments.

The Senate Finance Committee has voted SB 882 favorable with these amendments and it will be brought to the floor today.  The House Economic Matters Committee is expected to vote on HB 1228 this afternoon.

Session Update: Health Legislation

Bill Hearing, Employee Benefits and Relations, Health and Human Services, Intergovernmental Relations ,

This post summarizes the status of various health bills that MACo took a position on.

Ambulance Service Providers and Assignment of Benefits:  HB 83/SB 154 would require health insurers to reimburse an ambulance provider (must be owned, operated,or under the jurisdiction of a political subdivision or a volunteer fire company or rescue squad) directly for covered services.  If an ambulance company provides a service to an individual and the company does not participate in that individual’s insurance network, the insurer typically sends payment to the patient who often fails to pay the ambulance service provider.  MACo argued that this bill would greatly assist ambulance services with recouping transport costs.  Status: SB 154 has passed the Senate and was heard in the House Health and Government Operations (HGO) Committee on March 31.  HB 83 was voted favorable with amendments in the HGO Insurance Subcommittee and has been amended in similar form to SB 154, except HB 83 as amended sunsets after 3 years and 6 months, and provides for a study of the number of claims received, and the number and amount of claims paid.  Additional amendments may be considered when the full HGO Committee votes. MACO Testimony

Health Officers and the Delivery of Health Care Services:  HB 709/ SB 416,  as introduced, would authorize a health officer to enter into an agreement or contract, with consent of the county governing body and the written approval of the Department of Health and Mental Hygiene, to assist or participate in the delivery of health care services with a person to provide, facilitate, coordinate, or deliver health care services.  MACo supported both bills with an amendment to provide that these contractual or written agreements are entered into with the consent of the county’s governing body.  Status:  Both bills have been amended to incorporate this language and are moving towards final passage. MACo Testimony

Counties Providing Medical Professional Liability Insurance: SB 895 would require a county to provide medical liability insurance to a nonprofit health care provider within its jurisdiction. MACo argued that this bill placed an administrative burden and costly mandate on county governments at a time when revenues are waning, and State cutbacks loom large.  Status:  SB 895 was given an unfavorable report by the Senate Finance Committee. MACO Testimony

Budget Conferees Meet – Pensions and Retiree Health Areas of Disagreement

County Budgets, Employee Benefits and Relations, Health and Human Services, State Budget and Fiscal Issues , ,

As previously reported, a House and Senate conference committee has been appointed to resolve the differences in each chamber’s respective budget plan.  As reported by MarylandReporter.com, the biggest areas of disagreement are over pensions and retiree health benefits.  These differences are summarized below.

RETIREMENT AGE: The Senate adopted the “Rule of 92” to receive full pension benefits. This means that the age of an employee or teacher at their retirement and their length of service must add up to 92. Under the current requirements, adopted again by the House, anyone can retire with full benefits at any age after 30 years of service or at age 65 after 10 years of service.

COST OF LIVING ADJUSTMENTS: Both houses tie cost-of-living adjustments to the rate of return on the investments of the pension system. If the return falls below the target of 7.75% in any year, the Senate said retirees would get no cost of living increase.  The House said pensioners would get a 1% increase regardless of investment performance, and a 3% COLA if the target was met. The Senate capped the COLAs at 2%.

NEW PROPOSAL: The Maryland State Education Association has offered a counter-proposal that combines higher employee contributions and lower cost-of-living adjustments.

RETIREE HEALTH BENEFITS: There are substantial differences between the House and the Senate over how much to cut benefits and raise premiums for retiree health insurance.  The House wants to make retirees pay 25% of premiums, but the Senate set it at 20% and increased the deductible.

With respect to issues of importance for local governments a few remain to be resolved. These include the assessment  function shift, language to shift costs for the implementation of a video conference system to perform local inmate parole hearings, the Disparity Grant, and a few education items.  A summary of local government items to be resolved in conference can be found in a previous post.

Extended Unemployment Insurance Benefits Could Place Undue Financial Burden on Local Governments

Leslie Velasco Bill Hearing, Employee Benefits and Relations

MACo Associate Director Andrea Mansfield and MML Director Government Relations Candace Donoho testified  in support of  HB 1228/SB 882 with amendments.  The proposed bills would provide an extended 13 weeks of unemployment insurance benefits to Maryland’s long-term unemployed who have exhausted all of their State and federal emergency unemployment benefits.  The Federal government is providing 100% funding for private employers, but the State and many local governments are self-insured and would be required to pay these benefits directly to any former employees who qualify.  The costs for local governments are estimated to be $12 million.

During the hearing, MACo and MML requested the opportunity to work with the Committees to identify ways to help local governments accommodate these costs without putting new strains on local budgets.

MACo HB 1228 Testimony
MACo SB 882 Testimony

Senate Moves Bill on Ambulance Service Reimbursements

Bill Hearing, Employee Benefits and Relations

SB 154, sponsored by Senator Richard Colburn, which would ensure that county and volunteer fire companies and rescue squads are receiving reimbursements for providing this service is moving favorably through the Senate with MACo supported amendments.

Depending upon the jurisdiction, these services may be provided by a local government, or a volunteer fire company or rescue squad.  Although some ambulance services may become a participating provider with a health network, they are not a member with every carrier.  If an ambulance company provides a service to an individual and the company does not participate in that individual’s insurance network, the insurer typically sends payment to the patient who often fails to pay the ambulance service provider.  SB 154 would allow insurers to pay the ambulance providers directly to ensure they receive payment for their services.

The bill as amended provides that the ambulance service providers are reimbursed at appropriate rates.

HB 83, a bill with similar provisions will be discussed by the Insurance Subcommittee of the Health and Government Operations Committee on Thursday, March 24.

 

 

Bill To Allow Direct Deposit for Employee Paychecks Passes Senate with MACo Supported Amendments

Bill Hearing, Employee Benefits and Relations

Senate Bill 484, sponsored by Senator Nancy King, which authorizes county and municipal governments to make direct deposits for employee wages passed the Senate with MACo supported amendments. The original bill only applied to municipal governments and during testimony at the bill hearing, MACo supported the bill and requested county governments be given the same authority.  As amended, the bill provides that counties and municipalities may require the direct deposit of wages as a condition of employment for those employees hired after October 1, 2011, unless the employee does not have a bank account and opts out.  Employees hired prior to October 1, 2011 may elect to receive wages through direct deposit.