County Addresses Retiree Health Insurance Costs

By Holly Crocco

The Putnam County Legislature is poised to revise its policy on retiree health insurance benefits, offering a targeted retirement incentive program to encourage long-term and higher-compensated employees to retire earlier than planned, in exchange for a modified schedule of retiree health insurance benefits.

During the county’s Sept. 8 Personnel Committee meeting, Acting Personnel Commissioner Adriene Iasoni explained that 87 percent of the county’s retirees are Medicare-eligible, with 13 percent being non-Medicare enrollments through the New York State Health Insurance Program for state and local governments.

The retiree contribution schedule is proposed to be modified so that someone collecting a pension of less than $10,000 a year would pay 8 percent of their health benefits, those collecting between $10,000 and $29,999 would pay 10 percent, those collecting $30,000 to $84,999 would pay 17 percent, and those collecting more than $85,000 would pay 20 percent.

The county picks up the rest of the bill.

According to Patricia Rau of the personnel department, the Medicare rates charged to the county have been increasing “quite a bit” over the years.

“From 2025 to 2026, Medicare Family 1, which means family coverage with one enrollee on Medicare, went up over 20 percent,” she said. “That’s what the state billed us.”

Empire Plan individual coverage costs a retiree $1,611 per month, or a family $3,663 per month, until they are Medicare-eligible. Once on Medicare, the pricing changes drastically, ranging from about $596 to $1,633, depending on individual or family coverage.

Legislator Dan Birmingham, R-Southeast, noted that “the Empire Plan requires the county to reimburse the retirees that are on Part B. We have to pay them back for what they paid into for Part B, so they essentially get Part B for free,” he said.

Medicare Part B is what covers hospital stays, equipment, and doctor appointments, and – upon retirement – is required of anyone enrolled in Medicare.

Under the county’s new contribution schedule, a retiree collecting an $18,000 a year pension from the state would have a $7,156 premium, of which they would be responsible for paying 10 percent, or $715. The cost to the county would be the remaining $6,440. However, the retiree would also get $2,434 in Medicare Part B reimbursement.

“So for this $18,000 pensioned employee, the total cost to the county is $8,875, and the employee only pays $715, but … because of the plan we’re in, the county has to reimburse Part B that the employee paid – the retiree paid – on their own,” explained Birmingham. “So the employe is actually making $1,719 every year – essentially getting free health insurance as a retiree, and on top of that being reimbursed $1,700.”

He said there are 249 current county employees that are Medicare-eligible at age 65 or older that are “in the black.”

“So they get health insurance and they get a penny or more above that in reimbursement,” he said.

Then there are retirees with an income-related monthly adjustment that considers income outside of their pensions, such as Social Security, spousal income, or passive income such as investments. “So we can potentially – and I’ve seen it – give people back almost $4,900 for the employee and the spouse,” explained Payroll Manger Kathy Dean.

Birmingham noted that the county has $6 million set aside for retirees – which should be more than enough for the county to meet its obligations.

The goal of the new contribution schedule is to incentivize some of the higher-paid employees to retire earlier, allowing the county to hire new employees at lesser salaries, thus saving money on that end. Of the county’s more than 500-person workforce, Birmingham mused there may be at least several who may be persuaded to take the deal.

“The downside is we’re going to lose a very valued, experienced county employee, but the fiscal impact of that is to the positive,” he said.

Interim Finance Commissioner Alexandra Gordon cautioned against dipping into the fund balance to pay for retiree health insurance costs.

“Guidelines say you shouldn’t spend your fund balance on reoccurring costs,” she said. “We all saw that in the (Office of State Comptroller) guidelines, so it wouldn’t be safe to say we have $6.5 million sitting in the fund balance. It wouldn’t be sustainable to say we use that.”

The contribution schedule may not apply to those with CSEA collective bargaining agreements in place, or members of the PBA.

The Personnel Committee unanimously approved the new contribution schedule, and the full Legislature is expected to vote on it during its October meeting. If approved, it would go into effect in January.