Commissioners resolve retiree insurance issue

By Lisa Majors-Duff

The issue to be resolved, according to Manager Jay Denton, revolved around those retired employees over the age of 65 who were receiving a myriad of health care benefits. While all had Medicare as their primary provider, the majority of the retirees, about 13, received supplemental insurance through a Blue Cross/Blue Shield plan paid for by the county. For the past several years as retired employees with the required number of years of service reached age 65, they were taken off the county's plan and put on the federal Medicare plan.

Jackson County is a self-insured entity. That means the county contracts with an insurance provider, who in turn administers the county's policy. When a claim on the insurance is made, the county pays the bill, minus the employee's share (co-pay or deductible), from the general fund. All health care coverage for current, retired or disabled employees is paid for by county taxpayers, with the exception of Medicare for those age 65 and older.

Retirees with 30 years of service under age 65 remain on the county's insurance just as if they were still working. In addition to doctor and hospital visits, that coverage includes a $10-$20-$30 drug card ($10 for generic, $20 for name brand, $30 for a name brand when a generic is available), vision and dental benefits. When retirees reach age 65 and enrolled in Medicare, they no longer receive drug, vision or dental insurance.

This was the rule with a few exceptions. Four retirees over age 65 were receiving 80 percent drug coverage, while two others were receiving 50 percent drug coverage with different caps on their spending. Still two others continued to be covered as if they were still employed because of a delay in enrolling them in the Blue Cross/Blue Shield supplements plan.

Originally, Denton and finance officer Darlene Fox presented the board with a plan in August that would move all retirees into the same plan and provide them with 50-50 drug card. While this would have helped the majority of retirees who had no drug coverage, it would have meant that the four with 80 percent drug coverage would see a drop to 50 percent.

Commissioners rejected this plan, stating their reluctance to take benefits away from retirees. Instead, they said, a plan should be developed that mirrored state retirement plans, which continues drug coverage for those who turn 65. The cost of this plan would have been an additional $6,500 on top of the $71,000 already budgeted for retiree benefits, Fox said.

Denton and Fox came back to the board last month with another proposal. This time they recommended that all retired employees over age 65 be given AARP supplemental insurance with the addition of a drug card that would pay 80 percent of the purchase price and have no cap on spending. The cost of this plan, Denton said, would average $22,000 more than is already budgeted.

Just prior to the vote, Commissioner Stacy Buchanan asked that the AARP-administered supplements plan be approved for retirees over age 65, but that their drug card be based on a $10-$20-$30 co-pay instead of the 80-20 percent coverage. The additional cost of this plan was not available during the meeting, but Fox did indicate that the extra cost would be taken from the budget contingency.

The amended plan, which will take effect Jan. 1, passed by a vote of 4-0. (Commissioner Roberta Crawford was absent due to injuries sustained in an automobile accident.)

Most of the confusion during the discussion resulted when school board Chairman and disabled Department of Social Services employee Martha Queen brought up components of the county's insurance plan that did not directly relate to the issue on the table. Queen, who has on several occasions referred to her illness and expressed doubt that she will reach age 65, insisted that the county's new plan was hurting those who reached 65 because they lose vision and dental benefits. Using figures from an unidentified source, Queen said the county could spend an additional $17,220 to continue to provide those benefits for those who reach age 65.

Fox disputed Queen's figures, saying later that administrative costs were not included in Queen's estimates. Fox also pointed out that enrolling retirees in Medicare, a federal plan that does not include drug, vision and dental coverage, at age 65 is a policy that has been in effect for 15 years.

"There is no loss in benefits. In fact, we have offered a plan that is an enhancement," Denton told Queen. "I don't see how that would hurt anyone. I would be surprised to find objection to giving people additional coverage."

Another audience member, former DSS Director David Noland, repeated a request he made previously that benefits for all retirees with the required years of service never change, no matter what age they reach. This plan, he said, would be more in line with what the state supplies for its retirees and with what other North Carolina county governments offer.

To this Denton related the results of his research, which showed that neighbor Transylvania County does not offer insurance for its retirees. Commissioner Buchanan then said that as a state employee (Buchanan is a high school teacher) he does not expect his dental and vision coverage to continue after reaching age 65.

Discussion then shifted to the county's policy relating to law enforcement officers. As it stands now, state law allows law enforcement personnel to receive full cash retirement benefits after 20 years of service. Those who take this route, though, are responsible for paying their health insurance premiums until they reach age 60 or put in 30 years of service, the requirements for other county employees to retire with full health insurance benefits.

"I would be in favor of closing that loophole by dropping the age from 60 to 55 or by putting in a 'service retirement' requirement for law enforcement," Buchanan said. "This will save us money by allowing those officers age 55 to retire and allowing us to hire younger workers at less pay."

"I appreciate any help I can get," said retired DSS employee Margaret Crowe.

Due to the length of the discussion and the complexity of the issue, Chairman Denton suggested that a discussion on requirements of age verses years of service be reserved for a later date.

"I've got to say that I'm responsible for all this," Denton said with a tone of exasperation in his voice. "I could have left it where some folks get something and some folks get nothing. But I wanted to see some equity, whether you are a law enforcement, DSS or landfill employee, I wanted everyone to get the same thing."

Jackson County employs and provides insurance to 273 people. Figures from 1998 showed that nearly 15 percent of Jackson County, or 3,900 residents, had had no health insurance at all, according to Professor Tom Ricketts of the University of North Carolina at Chapel Hill's department of health policy administration. His figures were based on estimates supplied by the U.S. Census.

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