In an effort to rein in the growing uproar over retirees’ health care costs and benefits, the University of New Mexico has placed a moratorium on changes to health plans offered to employees and retirees, at least until May.
Regents President Jack Fortner, in an email Monday evening, noted the “considerable distress among current UNM employees, as well as retired employees, over the rumors and speculation that yet further changes may be coming in the health care benefit arrangements.”
Fortner said regents want to assure all employees and retirees “that no further changes are contemplated until the leadership of the University and Regents fully understand all the implications and impacts on individuals.”
One thing that needs more understanding is whether different insurance packages – including combinations of packages – might be preferable to those now offered or under consideration. If changes are made, he said, those affected would have “ample time to adjust.”
Moreover, no changes would be made until after the public is given the opportunity to comment and discuss those changes.
UNM President Bob Frank also sent out an email, referencing Fortner’s message and adding, “We recognize the importance and complexity of these issues, and are committed to slowing down the conversation. UNM employees and retirees are important, and no decisions will be made without input and thorough discussion.”
The messages were welcomed by some retirees attending Tuesday’s regents’ meeting.
“What I see happening (is) a much more positive and engaging” development, said Don Duszynski, president of the UNM Retiree Association. However, he told Frank and the regents, “We’re going to hold you to that statement.”
The issue took off in April when regents raised the insurance premiums for retirees who had not yet reached 65 and were not eligible for Medicare, by placing them in a separate pool. The regents’ action came after a scolding by the university’s auditors for failing to act to fund post-employment health care benefits, said David Harris, executive vice president for administration.
Regents also established a Voluntary Employee Beneficiary Association, or VEBA, for current employees, to be funded by a 0.5 percent employee salary contribution and 0.5 percent by UNM.
The IRS-sanctioned plan is expected to generate about $4 million annually toward reducing UNM’s unfunded liability, which could reach $162 million in 30 years if not addressed.
More than 900 employees opted not to join the VEBA, Harris said. That means, should they retire, they will not be eligible for health care benefits from the university. They can join the VEBA in five years, but will receive no credit for the five-year absence.
The two actions raised considerable alarm that health benefits would be cut, perhaps across the board, and many retirees and people planning to retire were soon up in arms.
The matter was the chief topic at a recent standing-room-only meeting of a regents’ committee at which chair Jamie Koch said nothing had been finalized in the debate over higher premiums and that the matter wouldn’t be resolved until the spring.