Press Releases
GOV. MALLOY AND COMPTROLLER LEMBO ANNOUNCE RETIREE HEALTH CARE LIABILITIES HAVE BEEN REDUCED BY $11 BILLION
(HARTFORD, CT) - Governor Dannel P. Malloy and Comptroller Kevin Lembo announced today that the state's future unfunded state employee and retiree health care liabilities have been reduced dramatically - by more than $11 billion - according to
an updated draft actuarial report
released today.
The draft OPEB report (other post-employment benefits) reduces the state's projected unfunded actuarial accrued liability (UUAL) from $31.2 billion (as of June 30, 2011) to $20 billion - an $11.2-billion reduction from the expected level for this year's valuation.
This significant change resulted from several collaborative health care cost control initiatives implemented across state government over the last few years, including changes related to the state's agreement with the State Employees Bargaining Agent Coalition (SEBAC) and initiatives by the Office of the State Comptroller and Health Care Cost Containment Committee (HCCCC)
"Today's announcement is further proof that the tough decisions we're making are having a real impact on our state's finances," said Governor Malloy. "By planning for the long term, we can make sure that future generations won't find themselves in a situation where they have to choose between critically important services and obligations to state employees. This report is proof that we can do both."
Lembo said, "This report - revealing that creativity and collaboration have saved us billions - should be a powerful incentive to continue these efforts to reduce costs for Connecticut. This future savings is extraordinary, resulting from partnership among state agencies and state unions in controlling costs, while maintaining quality services."
The draft report indicates that several recent health care changes and initiatives - implemented following the last OPEB actuarial report in 2008 - are responsible for the future cost reduction, including changes to the state's health care plan design, administration, and funding of the State Employee and Retiree Health Care Plan.
This $11.2-billion reduction is due to several factors:
The draft OPEB report (other post-employment benefits) reduces the state's projected unfunded actuarial accrued liability (UUAL) from $31.2 billion (as of June 30, 2011) to $20 billion - an $11.2-billion reduction from the expected level for this year's valuation.
This significant change resulted from several collaborative health care cost control initiatives implemented across state government over the last few years, including changes related to the state's agreement with the State Employees Bargaining Agent Coalition (SEBAC) and initiatives by the Office of the State Comptroller and Health Care Cost Containment Committee (HCCCC)
"Today's announcement is further proof that the tough decisions we're making are having a real impact on our state's finances," said Governor Malloy. "By planning for the long term, we can make sure that future generations won't find themselves in a situation where they have to choose between critically important services and obligations to state employees. This report is proof that we can do both."
Lembo said, "This report - revealing that creativity and collaboration have saved us billions - should be a powerful incentive to continue these efforts to reduce costs for Connecticut. This future savings is extraordinary, resulting from partnership among state agencies and state unions in controlling costs, while maintaining quality services."
The draft report indicates that several recent health care changes and initiatives - implemented following the last OPEB actuarial report in 2008 - are responsible for the future cost reduction, including changes to the state's health care plan design, administration, and funding of the State Employee and Retiree Health Care Plan.
This $11.2-billion reduction is due to several factors:
-
$6.2 billion in reduction is attributable to collaborative efforts to reduce health care cost trends and by the state and SEBAC to establish and fund an OPEB trust fund.
-
$4.94 billion in reduction has resulted from the conversion of the Medicare-age prescription drug program to an Employer Group Waiver Program that the comptroller implemented in collaboration with the HCCCC. This reduction also reflects changes in plan design, funding methods, eligibility requirements, contribution requirements for employees and retirees and the introduction of the Health Enhancement Program (HEP).
Although the report is a draft, Lembo said he does not expect significant changes in the final report.
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For Immediate Release: April 20, 2012
Contact: Juliet Manalan
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