HB 1789 (Filler-Corn), beginning July 1, 2024, would raise the amount of monthly health insurance credits (HIC) received by retired constitutional officers and their employees with a minimum of 15 years of creditable service from $1.50 to $1.75 per month per year of creditable service not to exceed $52.50 per month. In the case of retirement for disability, the substitute increases the HIC to $52.50 per month. The HIC for general registrars and their employees, and local social services employees remains at $1.50 per year for those who retire with a minimum of 15 years of creditable service. This will likely add $5.5 million to the unfunded liabilities of the constitutional officers’ HIC plan.
The cash infusions included in the introduced budget for June 2023 and June 2024 will partially offset the increase in liability from the substitute and provide a net increase in liability of approximately $3.9 million. These additional contributions were proposed to help bring the funding level of this plan up from its current status of just over 22.9%. As a result, the legislation will require an estimated increase in annual contributions of $390,000 per year. This will impact the Compensation Board and political subdivisions that have constitutional officers. The costs will vary from employer to employer given their individual staffing levels. Any increase in employer contribution rates for the change in HIC will be included in the contribution rates for the biennium beginning in FY 2025.
VACo Contact: Jeremy R. Bennett