OLYMPIA — Around Thanksgiving, dozens of retirees from the Snohomish Health District learned they would lose access to their health benefits effective Jan. 1. They were left in limbo, as the district would cease to exist as a separate government entity with the transition to being a department of the county.
Sen. June Robinson, D-Everett, introduced Senate Bill 5696 to allow the retirees back into the Public Employee Benefits Board system, if they choose. It would also prevent the same thing from happening to public retirees in the future. The bill passed both chambers with unanimous votes and awaits Gov. Jay Inslee’s signature.
Debby Riehl, who spoke with The Daily Herald in December, said it was “very good news” when she heard about the legislation. She chose to stay on COBRA with the Public Employee Benefits Board, or PEBB. With the changes, she will stay on it indefinitely instead of getting kicked off after 18 months. Even though the price is high, she feels the coverage is “excellent.”
Jackie Tomlinson testified in support of the bill at a legislative hearing in February. She left her job at the health district about five years ago, after more than 20 years of service. Tomlinson took retirement a few years later when she turned 65.
With such short notice last year, she also chose to continue with COBRA for 2023, paying 75% more in monthly premiums than what she had paid in 2022.
The final bill allows all retirees to rejoin PEBB until Dec. 31, 2023. However, people who are Medicare-eligible will not receive any subsidy as they had in 2022 and earlier. Tomlinson’s and Riehl’s monthly premiums won’t really change.
Tomlinson said she’ll stick with PEBB for now, and consider private Medicare Advantage plans in the fall.
People not yet eligible for Medicare will pay essentially the same monthly premium that they would have paid had none of this disruption occurred.
The Health Care Authority calculates how much non-Medicare-eligible retirees receive as a subsidy. It is quite complicated, but the bottom line is it’s about $450 per month per retiree in 2023. For Medicare-eligible retirees the subsidy is set in statute as half the premium or $183 per month, whichever is less.
Employers pay for all of this as a blended amount when they pay into PEBB for current employees. They aren’t necessarily aware that they are in fact paying for retiree health subsidies. In future contracts with the Health Care Authority, employers must agree to pay a lump sum if they leave PEBB. This money would cover the subsidies for non-Medicare-eligible retirees.
At the end of 2022, the health district retirees numbered just over 90, according to the state’s Health Care Authority. They are just one of six employers in recent years affected by the new law. Those employers will not be required to pay a lump sum for their non-Medicare retirees — it wasn’t in their contract. If non-Medicare retirees rejoin PEBB this year, the amount of subsidy can be covered by existing program funds, according to Dave Iseminger, director of the employees and retirees benefits division at the Health Care Authority.
Retirees will receive notice directly from the Health Care Authority after the bill becomes law and the process to rejoin PEBB is finalized.
Joy Borkholder is the health and wellness reporter for The Daily Herald. Her work is supported by the Health Reporting Initiative, which is sponsored in part by Premera Blue Cross. The Daily Herald maintains editorial control over content produced through this initiative.
Joy Borkholder: 425-339-3430; joy.borkholder@heraldnet.com; Twitter: @jlbinvestigates.