County discusses policy changes for retiree insurance benefits

Gonzales County Judge Pat Davis expressed concerns to the Gonzales County Commissioners Court about changing the requirements for retirees to have at least half of their health insurance paid for by the county at the regular semimonthly meeting Monday, Aug. 12.

At a special called meeting one week prior, commissioners discussed the possibility of making it possible for county employees to retire at age 50, if they have at least 20 years of service, and have 50 percent of their health insurance paid for by the county. This would constitute what is commonly called a “Rule of 70,” where the age of the retiree plus years of service add up to at least 70.

At age 60, the amount paid by the county for the retiree would be 100 percent of the premium until the individual reached age 65 and qualified to receive Medicare, at which time he or she would be enrolled in a Silver Choice plan with the county. The county would pay $300 per month towards the Silver Choice plan and if the retiree chooses a plan with higher coverage, they would pay the difference in cost per month.
The matter was brought to the table by Precinct 3 Commissioner Kevin La Fleur, who said he wanted to offer a benefit that would help the county attract and retain good employees while also getting rid of past practices where the county would pass a COLA (cost of living adjustment) that could tie up county funds for 15 years and cost hundreds of thousands of dollars.

“This all started out I was trying to save the county money,” La Fleur said.

Currently, Gonzales County allows non-elected employees to retire with benefits, including health insurance, at age 59 if they have at least 18 years of employment with the county — a Rule of 77. Elected officials can retire with benefits at age 55 if they have served at least 12 years (or three terms) in office.

Davis, who is a retired Texas Department of Public Safety trooper, said most state and county governments require retirees to meet a Rule of 80 or Rule of 75. He questioned why the county would make a change to policy that could require an additional $86,400 in spending the first year, based on an estimated 24 people who would qualify to receive about $300 per month from the county.

“That means that a person that works for this county at 50 years old that has 20 years, that means this county is going to pay insurance for that person until the age 65, so you are going to be paying for them for a total of 35 years?” Davis said. “Where are we getting this from? No other county does this.

“What is wrong with the current policy that we have now that we would change it? I think you owe an explanation to the taxpayers because they are the ones who are going to have to foot this. We are going to pay insurance, either half of it or whatever, for 35 years, and this person is going to have worked for the county for only 20 years. I don't see what the benefit is for a taxpayer to be paying somebody's insurance and we only got 20 years of service out of it.”

Davis said he pulled up the policy for Houston County, which has a Rule of 75 (age 50 and 25 years service) and noted Houston County pays just 25 percent of the retiree’s premium with the employee responsible for the remaining 75 percent; compared with the 50 percent the county was proposing.

The judge also said any policy the county enacts should have a “funding out” clause which would make it possible for the court to say it would not be obligated to make payments if the money was not available.

“Insurance is not going to get any cheaper,” Davis said. “It's just going to continue to rise. And so what would that look like down the road for the county? We don't know what it would be. We don't know what our finances are going to be down the road.”

Precinct 4 Commissioner Collie Boatright asked if the county could — instead of giving a COLA or changing the retirement policy — give a one-time lump sum payment to retirees of $1,000 with the understanding that if finances did not allow it, there would not be another payment the following year.

Auditor Becky Weston cautioned that instead of a lump sum, the money should be paid out in equal monthly installments; that way, as attrition happens, employees no longer eligible for the money would not have been paid for a full year.

Weston said doing a 3 percent COLA through the Texas County and District Retirement System (TCDRS) can cost Gonzales County between $50,000 to $56,000 per year, or a sum total of nearly $800,000 as it takes 15 years to fully fund a COLA.
“It doesn’t matter whether you still have survivors at that time or not, because it carries on with their beneficiaries,” Weston said.

Commissioners discussed the possibility of keeping the retirement age 58 or 59 for non-elected officials and 55 for elected officials, yet offering the payment to help retirees with their insurance before they turn 65 and qualify for Medicare. The proposal will be put into writing and discussed again at a future meeting.

County discusses policy changes for retiree insurance benefits