RALEIGH (AP) — North Carolina state employees and public school teachers won't qualify to receive state medical coverage when they retire if they are hired in 2021 and beyond.
The alteration was inserted in the 2017 state budget law. Legislative Republicans who backed the change said it was needed to rein in future anticipated health care costs for covered employees, which are already calculated in the tens of billions of dollars. It's a problem that other states face.
North Carolina state employees or teachers who began work before Jan. 1 still qualify for retiree health coverage — either at no cost or at a partial cost, based on the number of years they work for the state and when they began. The future disqualification also applies to new University of North Carolina system workers.
State Treasurer Dale Folwell, whose office oversees the North Carolina State Health Plan, has warned lawmakers for years about the fiscal threat of long-term retiree health expenses. But he neither sought the 2017 provision nor was consulted on it. Still, Folwell is carrying out the changes, which he said will save the state money over the next 30 years, The News & Observer of Raleigh reported.
The health plan offers supplemental insurance for Medicare enrollees and regular plan coverage for those who aren’t 65 years old. Employees will continue to qualify for health coverage while actively working. The changes do not affect pensions.
Suzanne Beasley, a lobbyist for the State Employees Association of North Carolina, said dropping the retiree health benefit for new hires will take away from the decent benefits that rank-and-file state workers have expected over the years.
The state hired 17,705 people in 2019, and over 14,400 workers during 2020, according to the Office of State Human Resources. The State Health Plan covers well over 700,000 active public employees, retirees and their family members.
“As a career state employee who’s making modest wages, (to know) when you retire you have health coverage for your golden years, that’s a huge benefit,” Beasley said.