Section 34-201 - Blue Ribbon Commission to Study Retiree Health Care Funding Options [Subtitle subject to abrogation]. - Maryland Statutes

§ 34-201. Blue Ribbon Commission to Study Retiree Health Care Funding Options [Subtitle subject to abrogation].
 

(a)  Commission established.- There is a Blue Ribbon Commission to Study Retiree Health Care Funding Options. 

(b)  Membership.- The Commission shall consist of the following members: 

(1) five members from the Senate of Maryland, appointed by the President of the Senate; 

(2) five members from the House of Delegates, appointed by the Speaker of the House; 

(3) the State Treasurer, or the Treasurer's designee; 

(4) the Comptroller, or the Comptroller's designee; 

(5) the Secretary of Budget and Management, or the Secretary's designee; 

(6) the Chancellor of the University System of Maryland, or the Chancellor's designee; 

(7) the Executive Director of the State Retirement and Pension System, or the Executive Director's designee; and 

(8) three members of the public with expertise in either funding retiree health benefits, the economics of affordable retiree health care programs, or investing pension fund assets, with one member each appointed by the Governor, the President of the Senate, and the Speaker of the House. 

(c)  The President of the Senate and the Speaker of the House shall jointly designate co-chairs of the Commission from the Senate members and House members appointed to the Commission. 

(d)  Guiding principles.- The Commission shall be guided by the following principles: 

(1) a recognition that: 

(i) funding State retiree health benefits solely on a pay-as-you-go basis is no longer a viable solution; and 

(ii) any proposed solution, funding or otherwise, should treat employees, retirees, and taxpaying citizens fairly; 

(2) in light of the enormity of the State's projected unfunded accrued liability for retiree health care and the potential effect this liability may have on the State's bond rating, the State's ultimate goal should be to fully fund the obligations set forth under the Government Accounting Standards Board (GASB) Statement 45; 

(3) a clear message should be sent to the bond rating agencies that the State is taking this issue seriously, and a multiyear plan that clearly articulates the State's commitment to address this issue should be implemented as soon as practicable; 

(4) any funding solution proposed by the Commission will likely include some direct State appropriation, with the Commission pursuing any and all viable funding sources, including the possibility of employee contributions during active service; 

(5) the Commission should consider the actual impact any changes in the State Employee and Retiree Health and Welfare Benefits Program will have on the State's annual required contribution and should look for appropriate cost efficiencies that maintain the quality health care coverage the State provides for retirees; and 

(6) special consideration should be given to State retirees who are receiving benefits or State employees who have accrued at least 16 years of service with the State and have vested for State retiree health benefits under current law, recognizing that while there may be no legal obligation on the part of the State to provide retiree health care benefits to these individuals, the Commission should view the commitment to provide retiree health care benefits to these individuals as an ethical one. 

(e)  Duties of Commission.- The Commission shall: 

(1) contract with an actuarial consulting firm to: 

(i) commission an actuarial valuation that illustrates the State's annual required contribution as both a fixed dollar amount and also as a percentage of payroll; and 

(ii) provide ongoing services to the Commission throughout its existence; 

(2) review the specific legal obligations of the State to provide retiree health benefits to existing retirees, fully vested employees, active employees, and new employees; 

(3) study the cost drivers associated with the State's unfunded retiree health care liabilities which provide the basis for the unfunded accrued liability as well as the ongoing normal costs associated with the retiree health care liabilities; 

(4) review the current health care benefit levels for both State employees and retirees and how the benefits compare to benefits provided under Medicare, by private employers, and by other public employers, with a particular emphasis on whether the various levels are appropriate, equitable, and sustainable; 

(5) review the eligibility requirements for State retiree health care benefits with a particular emphasis on whether the requirements are appropriate and equitable; 

(6) review alternative vehicles for providing health care benefits to State retirees including Voluntary Employee Beneficiary Accounts (VEBAs), Section 401(h) accounts, Section 115 trusts, health reimbursement arrangements, and health savings accounts; and 

(7) recommend a multiyear implementation plan to address fully funding the obligations of the State as set forth in GASB Statement 45 as soon as practicable. 

(f)  Staffing, information, and funding of actuarial consultants.-  

(1) The Commission shall be staffed by the Department of Legislative Services. 

(2) (i) The Department of Budget and Management shall provide any information the Commission may require with regard to health care benefits and health benefit costs for State employees and retirees. 

(ii) If the Department of Budget and Management is unable to provide the information requested by the Commission under subparagraph (i) of this paragraph, the Commission may contract with an independent health care consulting firm for assistance. 

(3) (i) The Department of Budget and Management shall provide the funding for the Commission to hire more than one actuarial consulting firm and a health care consulting firm. 

(ii) 1. The Commission may request up to two actuarial valuations annually. 

2. If the Commission requests two actuarial valuations in the same year, each shall be performed by a different actuarial consulting firm. 

(g)  Report.-  

(1) On or before December 31, 2008, the Commission shall issue an interim report of its findings to the Governor and, in accordance with § 2-1246 of the State Government Article, the General Assembly. 

(2) On or before December 31, 2010, the Commission shall issue a second interim report of its findings to the Governor and, in accordance with § 2-1246 of the State Government Article, the General Assembly. 

(3) On or before December 31, 2011, the Commission shall issue a final report of its findings and recommendations to the Governor and, in accordance with § 2-1246 of the State Government Article, the General Assembly. 
 

[2006, ch. 433; 2007, ch. 355; 2008, chs. 228, 229; 2010, chs. 560, 561.]