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Legislative Report

Report 09-13
April 24, 2009

HEALTH PLAN CHANGES BECOME LAW

Governor Perdue on Thursday signed into law the changes in the State Health Plan that had been approved by the General Assembly the previous day. The enactment of Senate Bill 287 clears the way for the State Health Plan to conduct the annual open enrollment in May and to implement the changes in benefits effective July 1.

The final version of Senate Bill 287 reflects a number of important compromises that were developed by the Joint Conference Committee. Highlights of the new law are presented below.

  • The State Health Plan benefit year will remain on the July through June cycle. The House proposal to move to a calendar year effective January 1, 2011 was removed due to one-time costs of $22 million.
  • The proposed increase in premiums for spouse and dependent coverage were reduced from the proposed 10.0% increase in 2009 and 2010 to 8.9% in each year.
  • The Wellness Initiatives proposed by the Senate are included in the new law. Effective July 1, 2010, plan members who are not Medicare eligible and who use tobacco products will be assigned to the PPO Basic (70/30) Plan. Effective July 1, 2011, plan members who are not Medicare eligible and who are obese based on clinical guidelines will be required to enroll in the PPO Basic Plan unless their obesity is related to a medical condition or they are participating in a weight control program.
  • The new law establishes a separate co-payment category for chiropractic care, mental health services, physical, occupational, and speech therapy services with members paying $55 per visit under the PPO Basic Plan and $45 under the PPO Standard Plan.

A detailed analysis of the revised State Health Plan benefit structure will be presented in next week’s Legislative Report.

COMMITTEE WILL CONSIDER LOCAL COLA BILL

The House Committee on Pensions and Retirement is scheduled to consider House Bill 934 on Wednesday, April 29. This bill would authorize a 1.0% Cost-Of-Living Adjustment for retired local government employees, effective July 1, 2009. If approved by the Committee on Wednesday, HB 934 will be re-referred to the House Finance Committee. This bill is supported by our Association, the League of Municipalities, and the Association of County Commissioners.

Please call your members of the House, especially if they are members of either the Pensions and Retirement Committee or the Finance Committee. Ask them to support House Bill 934. Please point out that this bill does not require any state funding. The COLA will be paid from undistributed gains that are available in the Local Governmental Employees’ Retirement System.

HOUSE APPROPRIATIONS COMMITTEE SETS HEARING

The Appropriations Committee of the North Carolina House of Representatives will hold a public hearing on Tuesday, April 28, to receive comments about the state budget. We urge all who can attend one of the sites to participate. If you decide to sign up to speak, please stress the importance of these two points:

  • The need to increase the state’s contribution to the Teachers’ and State Employees’ Retirement System ($29 million needed in 2009-10 and $350 million in 2010-11)
  • The impact that higher State Health Plan co-pays and deductibles will have on retiree budgets. We need a long term solution for the Plan by 2010-11.

The hearing will be held from 6-9 p.m. in the auditorium of the North Carolina Museum of History in Raleigh on Fayetteville Street. Ten community colleges across the state will host interactive broadcasts of the hearing and it will also be streamed live on the Internet.
Committee members would like to invite members of the public to offer suggestions and comments about the budget. Each speaker will have three minutes to share information. Other rules may also be established and will be available online at www.ncleg.net closer to the date of the hearing. Information about how to submit written comments and how to access the online broadcast will also be available at the site.

The community colleges that will serve as host sites are:
Johnston Community College, Smithfield
Bladen Community College, Dublin
Central Piedmont Community College, Charlotte
Fayetteville Technical Community College, Fayetteville
Forsyth Technical Community College, Winston-Salem
Pamlico Community College, Grantsboro
Southwestern Community College, Sylva
Surry Community College, Dobson
Vance-Granville Community College, Henderson
Martin Community College, Williamston

Visit www.nccommunitycolleges.edu/colleges_map.aspx for contact information and driving directions to each campus.

COMMITTEE ACTION THIS WEEK

The Senate Committee on Pensions, Retirement, and Aging met on Wednesday. Several bill received initial consideration and the Committee approved one bill. Senate Bill 863 which allows employees of local economic development organizations that receive at least 50% of their funds from local governments to purchase up to 5 years of nonqualified service in the Local Governmental Employees’ Retirement System (LGERS).

SB 863 received a favorable report and is scheduled for consideration by the full Senate on April 27th.