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Office of Administration Announces Plan to Preserve Health Care Benefits for Current, Future Retired Commonwealth Employees
Date:9/28/2007

Benefits Will Not be Cut; Plan Changes Will Reduce Cost Increases by $94

Million a Year

HARRISBURG, Pa., Sept. 28 /PRNewswire-USNewswire/ -- The Office of Administration today announced changes to the commonwealth Retired Employees Health Program (REHP) that will preserve generous health care benefits for current and future retired state government employees.

"Rising health care costs are one of the greatest challenges facing employers across the country," Secretary of Administration Naomi Wyatt said. "Commonwealth retirees have excellent health care benefits, and we are committed to continuing to provide one of the most generous health care plans in the country. The changes we are announcing today will standardize the benefits for all 62,000 commonwealth retirees without eliminating coverage for any retiree."

Currently, the approximately 52,000 workers who retired on or before July 1, 2004 have a slightly different health care benefit plan than the approximately 10,000 workers who retired after that date and current employees. The changes announced today will put all retirees on essentially the same benefit plan as current employees and those who retired after July 1, 2004.

"As health care costs continue to rise, we must take prudent steps now to ensure that these generous benefits are preserved for current and future retirees," Wyatt said.

Annual costs for the commonwealth's Retired Employees Health Program have increased 63 percent -- from $336 million to $550 million -- in just four years. Out of that $550 million, retirees contribute less than 0.2 percent toward the cost of health care. Last year, the commonwealth spent an average of $9,250 in taxpayer money per retiree on health care benefits.

Retiree health care costs are a growing concern nationally. Other states and many private companies have had to make drastic adjustments in their retiree health care plans. In Illinois, retirees
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SOURCE Pennsylvania Office of Administration
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