Retired teachers told: Medical bills on state Tuesday, February 27, 2007 • BY DUNSTAN McNICHOL • Star-Ledger Staff Gov. Jon Corzine, who highlighted the staggering tab for the medical benefits promised to retired public employees in his budget speech last week, has pledged that retired teachers won't have to help pay their $53.6 billion share of the bill. The promise was worked by Corzine in a side deal with the state teachers' union this month while he hammered out a separate four-year collective bargaining agreement with state workers. Corzine said he would endorse pending legislation to "ensure there will be no premium sharing for retirees now or in the future," the New Jersey Education Association said in a message to members last week. "We are very pleased to have that change," said Lynn Maher, spokeswoman for the NJEA. "Definitely, it's a material change." Besides the pledge of no future premium sharing, Corzine said the NJEA could set up a new publicly funded health insurance program for teachers, independent of the health benefits program for state workers and local government employees. Unlike the existing benefits program, which is governed by a panel dominated by state officials, the new program will be overseen by a panel divided evenly between NJEA appointees and administration designees. Corzine said the promises he made do not expand the benefits teachers get now. "I don't think I gave anything away," he said during a meeting with The Star-Ledger editorial board Friday. TRIMS FOR TAXPAYERS In designing a new medical insurance program for teachers, the NJEA would include features that will cut taxpayer costs by $25 million to $40 million in the first year, said Tom Vincz, spokesman for the Treasury Department. Teachers also have agreed to boost their payments into the state pension fund, to raise the minimum retirement age to 60 for new hires, and to participate in a full review of the costs of the retirement and benefit program in five years, Vincz said. "They've stepped up to the plate and have accepted these conditions," Vincz said. "The unions understand that we have to make some changes to the benefits plan to benefit both the taxpayers and the union." The deal Corzine struck with public employee unions during contract negotiations that ended last week, if ratified, will require state workers to pay 1.5 percent of their salaries and pension payments toward their post-retirement insurance, effective July 1. "At the core, we think it's unusually unfair for a low-paid clerical worker to have to pay for health insurance in retirement while other public employees are given that option for free," said Carla Katz, president of Local 1034 of the Communications Workers of America, who is opposing the proposed state worker contract. "We believe their unions negotiated something we should negotiate with the governor." AS BEFORE Corzine said the proposed guarantee of free retirement coverage for teachers simply continues the existing system, and would apply only to teachers already on the payroll or retired. For future hires, he said, local school boards can negotiate post-retirement insurance payments in contract talks. The post-retirement medical benefits promised to 325,000 working and retired teachers are scheduled to cost the state $53.6 billion, a recent accounting report showed. That's about two-thirds of the $78 billion bill that taxpayers face for the retirement health benefits for all public employees. Maher said NJEA negotiators got the protection against premium sharing as part of a trade-off in which they agreed to let the state close the rich "traditional" insurance plan. The cost of that program soared by 50 percent last year, largely because just one company offers the coverage. Under the deal the NJEA and Corzine worked out, the traditional plan will be replaced by a more typical "preferred provider" system, which should attract competitive bids and lower prices, Maher said. Dunstan McNichol may be reached at dmcnichol@starledger.com or (609) 989-0341. © 2007 The Star-Ledger. Used by NJ.com with permission.