Regents up retirees’ health premiums

Correction: This post previously stated regents approved a new trust fund. However, regents are holding off on the trust fund for now.

University of New Mexico regents were so unsure of proposed changes to the school’s retiree health benefits program Tuesday morning that they refused to vote on it.

By the afternoon, though, they had changed their minds and unanimously approved measures to increase retirees’ share of premiums to tackle UNM’s multimillion-dollar unfunded liability. That unfunded liability had been projected to be $162 million in 30 years.

Regents in the morning made clear their lack of support for the proposed changes when no one seconded a motion by regent Jamie Koch to accept the changes with stipulations.

But at lunchtime, David Harris, executive vice president for administration, had some harsh words for regents President Jack Fortner: The board had made a “colossal mistake” in not acting because the problem needed immediate attention, Fortner said.

Fortner took that to heart, and regents decided to reconsider.

In an interview with the Journal after the meeting, Fortner said he initially would have seconded the morning motion but couldn’t because he is chair of the board.

“The reason no one got a second (for the motion) is because we weren’t as comfortable as we wanted to be,” Fortner said.

He said regents wanted more details and were particularly concerned about the effect on retirees who are under 65 years old.

They voted, without much discussion, to approve the same plan that was before them in the morning, but asked for more study on how to mitigate the burden on retirees who are under 65.

Fran Wilkinson, who co-chaired the task force that recommended the changes, barely made it to the second round of discussion. Like most at the meeting, including Harris, who said the issue was dead, Wilkinson thought that was the end for the recommendations and left. She and members of the task force were in a different meeting Tuesday when she got a call telling her to return to the regents meeting.

Premium increases, including those for retirees under 65,  will take effect this summer. That group represents a small portion of the overall number of retirees on UNM’s health benefits program. Of the 2,500 retirees in the program, about 750 are younger than 65. Fortner said he was concerned those retirees were taking the brunt of the cuts.

For example, some under-65 retirees currently pay about 40 percent of their premiums, with the university covering the rest. Under the new plan, someone who earned between $25,000 and $34,999 annually eventually will have to pay half of their premiums. Retirees who make $35,000 and above will have to pay 60 percent of their premiums in three years.

UNM health care benefits for retirees over 65 serve as a supplement to Medicare. Those people will start paying 60 percent of their premiums, while the university will pay the other 40 percent. Currently, UNM pays 53 percent, while employees pay 47 percent.

Several retirees who attended the meeting said the changes, especially those impacting pre-65 retirees, were unfair.

“Separating based on age is discriminatory and unfair. Yes, younger employees may pay a little more, however, that is not the nature of a group policy,” retiree Barbara Gabaldon said.

Gabaldon, who is younger than 65, said she worked at UNM for 26 years and paid her fair share into the benefits.

Wilkinson said the task force was happy to look at ways to lessen the burden on under 65 retirees.
— This article appeared on page A1 of the Albuquerque Journal