School support staff health insurance credit bill headed to Governor’s desk

March 16, 2020

Legislation requiring school divisions to provide a health insurance credit (HIC) of $1.50 per year of service to all retired members of local school divisions (other than teachers) with at least 15 years of credible service will now be acted upon by Governor Ralph Northam. HB 1513 (McQuinn) requires school divisions to provide a health insurance credit of $1.50 per year of service and gives local school divisions the option of providing an additional $1 per year for a total credit of $2.50, as well as removing the $45 cap for monthly payments to eligible employees. The bill was amended in conference committee to remove the Senate’s financial contingency clause and to have a delayed enactment date of July 1, 2021.

As previously reported, a HIC is provided to eligible retirees as a reimbursement to assist with the cost of employee health insurance premiums. Retirees are reimbursed based on their number of years of service and the credit amount per year of service. The HIC for non-teacher local employees is currently set at $1.50 per year of service, but participation is optional for localities and school divisions. Currently, 37 school divisions have opted to provide this HIC to their eligible employees. The legislation as written would require the remaining 96 school divisions to provide this HIC.

The conference report budget proposal contains an amendment providing approximately $1 million in General Funds in each year of the biennium for the state share of the expanded HIC proposed. HB 1513 would impose an unfunded mandate on localities and VACo has expressed concerns over this legislation for that reason.

VACo Contact: Jeremy R. Bennett

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