Retiree Health Plans in the Public Sector

Retiree Health Plans in the Public Sector

Is There a Funding Crisis?

Robert L. Clark and Melinda Sandler Morrill

While retiree health plans are a dying benefit in the private sector, all US states and many local governments extend health insurance coverage to their retired employees. This book is the first to thoroughly examine public sector health insurance plans. Retiree Health Plans in the Public Sector provides a detailed description of the current plans offered and compares how they vary across states.

Chapter 3: Descriptions of State Retiree Health Plans

Robert L. Clark and Melinda Sandler Morrill

Subjects: economics and finance, public sector economics, social policy and sociology, ageing


1 Every state provides some type of retiree health benefit to its employees. However, these plans differ substantially in their generosity and coverage and hence their cost to each state. In this chapter, we describe the key characteristics and parameters of each state’s retiree health plan. Analysts interested in understanding the costs and benefits associated with retiree health insurance need to have a working knowledge of the key components of these plans. These characteristics include age and service requirements necessary to qualify for participation in the state plan after retirement, the premium paid by the retiree, and the cost to the state of providing this important benefit. The discussion provides a general overview of the state plans and lists the web addresses for each state plan so that interested readers can search for additional information about the plans. The information in this chapter is based on a comprehensive review of the websites of each state conducted in May and June of 2009. Readers should note that states can and do alter the terms of these plans. While most of the changes are effective for new hires, certain changes in the plans, such as deductibles and co-payments, are regularly modified. I. ELIGIBILITY CRITERIA FOR INCLUSION IN THE STATE HEALTH INSURANCE PLAN Typically, states require employees to have a minimum number of years of service to be eligible to continue to be covered by the state health plan in retirement. In general, a retiree is either allowed to remain in the state...

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