Retiree health insurance premium freeze extended

August 25, 2016

In a significant disappointment for cities and towns, the Legislature in July voted to override the governor’s veto of a state budget provision that freezes municipal retiree health insurance contribution rates for another two years.

As a result, cities and towns that used the municipal health insurance reform process cannot adjust contribution percentages for retiree health insurance for another two years (until July 2018).

The municipal health insurance reform law, passed in 2011, froze the retiree rates through July 2014. The freeze was subsequently extended for an additional two years and now has been extended again, reaching a total of seven years.

Retirees and unions were exerting pressure to override the veto, even as the MMA and the administration called on the Legislature to let the governor’s veto stand. The MMA argued that the freeze takes away one of the few tools municipal officials have to manage rising health insurance costs.

To date, more than 100 cities, towns and other local entities have adopted and used the reform process to save hundreds of millions of dollars in health insurance costs.

Cities and towns that did not adopt and use the municipal health insurance reform process may still change retiree premium contribution rates.

Municipal retirees do not have collective bargaining rights under Chapter 150E.

Written by MMA Senior Legislative Analyst Katie S. McCue

posted by Jeff Bennett