Cutting retiree medical benefits for state employees will hurt hiring and retention

North Carolina’s public employees often are lured to the private sector by better pay and benefits, which isn’t surprising given the relatively modest compensation they receive from the state. But for decades, many state workers have kept going because of job security and one benefit in particular: the fully subsidized health care coverage they can get in retirement.

It’s not some kind of generous gift. To qualify, retired employees have to have worked for the state at least 20 years, or the bulk of a career. And they have to meet age requirements. Those who retire between 10 and 20 years of experience pay half of the cost of their coverage.

Is this is a good benefit? Of course it is, especially considering the cost of health care and the difficulty some older people have in getting coverage supplemental to Medicare to cover gaps.

It’s a major incentive for good workers to stay with the state.

Now, the state Senate is looking, in a rather secretive way through a provision deep in its budget, to end that health care insurance benefit for those hired by the state after Jan. 1, 2016. Current employees wouldn’t be affected. But don’t think of that as some kind of generosity on the part of Republican senators pushing this idea. If benefits of those under the current plan were ended, legal challenges would ensue.

There’s a reason this idea was buried in the Republican Senate budget, and that was to avoid debate that would generate tremendous and doubtless angry response from tens of thousands of current and former state employees. Perhaps that’s why, asked by a reporter about the proposal, Senate budget writer Sen. Harry Brown just walked away. That is a most discouraging action on the part of an elected official, to decline to explain or defend an action.

The State Employees Association of North Carolina (SEANC) is reacting strongly to the proposal, in the negative, of course, but that organization has been weakened by internal trouble and the legal issues hanging over its former leader.

Nevertheless, the objections to this very bad idea are sound.

The state does not provide subsidized health insurance for its employees’ spouses and children, as many other states do. Salaries for some state occupations are lower, in some cases much lower, than comparable private sector jobs. And employees, even those in career jobs who are not political appointees, still have to deal with the influence of politics when it comes to their department heads, for example. And some political appointees are more competent than others.

But as one SEANC lobbyist said, the state still can point to that subsidized health care coverage for retired employees as a major perk they are unlikely to get anywhere else. It’s a draw. It’s an attractive long-term security benefit. It is something that can keep people in a job, and in a productive way, for most of a career.

Chuck Stone, the lobbyist, claims that the state already is “having trouble recruiting and retaining career level state employees” because of stagnant wages and other cuts. That’s true, and state employees also have felt a lack of respect from top leaders. These factors undoubtedly have led some to seek other employment.

As House and Senate negotiators hammer out a final budget, we must hope that cooler heads prevail and that lawmakers who have doubts about targeting an important benefit for state workers will speak up and stop this movement. It smacks of political payback by Republicans who haven’t liked the criticism they’ve occasionally gotten from SEANC and some members. The problem with such payback is that taking away this benefit will hurt state government from top to bottom – and will thus hurt the people government is supposed to serve and often serves well.