Deseret Morning News graphic

Utah's 104 part-time legislators don't get much in the way of retirement for their years of lawmaking service — $10 a month for each year in office.

But lawmakers quietly voted seven years ago to start giving free or heavily subsidized health insurance to retired legislators, a benefit ballooning in cost, doubling in three years.

Angry state workers who saw their health insurance retirement benefits cut back by the 2005 Legislature are questioning legislators' benefits.

The state health insurance for retirees was given first to state workers in the late 1980s in lieu of cash pay raises, legislators were told during debate over the controversial HB213 during the 2005 Legislature.

It was given a decade later to legislators as a perk, a nice benefit for the low-paid, long-serving lawmakers. At first, it didn't cost much.

Legislators can "retire" at 62 with the same comprehensive health insurance they received as sitting lawmakers, paid for by the state. When they reach 65, the state pays for a supplemental plan that covers costs that Medicare doesn't pay.

In arguing in favor of HB213, lawmakers in the 2005 Legislature said the health care/unused sick leave conversion benefit for thousands of upcoming state worker retirees could, within a few years, balloon to $250 million or more, crippling state finances.

"It's being fiscally responsible and looking out after all the taxpayers," who won't be able to afford the huge bill that would have been coming, said House Majority Leader Jeff Alexander, R-Provo, when HB213 passed the House.

The state has approximately 20,000 employees, only 104 legislators. So while the costs of legislators' retirement benefits are growing, the retired legislators' health-care premiums don't have anywhere near the possible financial impact as those of the more numerous regular state workers' benefits.

Oddly enough, because the Legislature's separate pension fund has earned so much interest over the past few decades that the Legislature has not been putting any cash into it. Currently, the fund is actually 123 percent funded, retirement officials say, even though 221 retired lawmakers are now getting pensions totaling $712,000 a year.

But with rising health care costs and more legislators reaching retirement age, each year lawmakers have had to put more and more cash into the Legislature's health care insurance account for retired lawmakers, officials say.

If a 62-or-older retiring legislator has 10 years in office he gets 100 percent of the health insurance premiums paid by the state for the rest of his/her and a spouse's lives. If he served eight years in the Legislature, 80 percent of his premium is paid by the state; six years in office, 60 percent; and with only four years in office (just one Senate term or two House terms), 40 percent of his health insurance premium is paid for life by the state.

Legislative staffers required the Deseret Morning News to file a Government Records Access and Management Act request to obtain budget numbers on how much lawmakers were spending yearly on their retired colleagues' health insurance.

This year (fiscal 2004-05) the Legislature will pay $120,231 for 28 separate policies. There are actually 22 retired lawmakers, the other policies going for surviving spouses or minor children. (The health insurance benefit started in 1998 and retired lawmakers who retired before then and their families don't qualify for it.)

In 2002, the Legislature paid $68,054 for 16 retirees, so the cost has nearly doubled in three years, the GRAMA numbers show.

The legislative retirement health care benefit has become a financial "black hole," one legislative staffer said.

As health care costs continue to rise, and as more and more Utah lawmakers stay in office until age 62, when they qualify for the benefit, the cost will further escalate, legislative staffers say.

The 75 House members face re-election every two years, the 29 senators every four years, and so one could argue incumbents could be kicked out of office at regular intervals, and so not be in office when they reach age 62. But the political reality is that most lawmakers hold safe seats, easily winning re-election if they run.

In the 2004 elections, 93.5 percent of the House members seeking re-election won; 92.3 percent of senators seeking re-election.

It's hard to say how many legislators will be in office when they reach 62, making it difficult for legislative budgeters to plan for the health care premium costs.

Currently, 20 senators are either over 62 or approaching their mid-50s, a term or two away from qualifying. About two dozen House members are in the same category.

It's not a career

Because lawmakers are part time and don't make a career of legislative service, legislators' retirement and health care benefits are treated differently from those of full-time state employees.

The 2005 Legislature decided to trim back the sick-leave conversion/health care premiums portion of the state's retirement policy, a move lawmakers and Gov. Jon Huntsman Jr. said was mandatory because of out-of-control health care costs. The employee unions strenuously objected to the changes and some angry state workers suggested that lawmaker benefits should be reduced as well.

The Utah Public Employees Association, which represents 6,000 to 7,000 state workers, was "criticized for not attacking legislators" this past session over HB213, says Audry Wood, UPEA executive director.

"But legislators set our pay and benefit packages each year," she added, so UPEA didn't feel comfortable bashing the lawmakers.

The legislators' retirement health care "is a pretty nice benefit. We had a pretty good one, too," before the HB213 changes were adopted, she said. "We don't begrudge lawmakers their package. We hope if (lawmakers') benefits are changed, there will be a full hearing, all can participate. We were locked out of the process" last session, she complained.

Wood said she doesn't think it is unfair that the 100 percent retirement health insurance benefit can be earned by lawmakers (and their families) after the legislator has served just 10 years in a part-time office.

But if a retiring legislator qualifies, he gets it for life. His spouse gets it for life and any of their minor children are covered until they are adults.

Regular state workers get 100 percent of their post-retirement health insurance premiums paid for only several years, as their unused sick leave is converted, based on a formula, into health care premium payments.

Pre-HB213, the average 30-year-plus state worker might get 10 years of free health insurance upon retirement, retirement office officials said. Post-HB213, a longtime retiring worker may get two years of free health insurance, experts told the newspaper.

After a retired worker's unused sick leave has been expended for premiums, the retiree must pay for his supplemental health care coverage. Premiums currently run between $87 and $250 a month, depending on how comprehensive a plan the worker picks, officials said.

Tough to manage

The legislative benefit, depending on how many older legislators retire each year, is a floating target for legislative budgeters.

One recently retired legislator has a wife 30 years his junior. Assuming he signed up for the state health care insurance (individual retirement records are not public), the state could be paying his wife's health care insurance for 40 or 50 years, until her death.

Senate President John Valentine, R-Orem, said he doesn't plan on staying in the Legislature until he retires and understands that the legislative retiree health insurance is growing. Informed that a spouse also gets the benefit for life, Valentine said: "That may be something we want to look at."

In 2003, legislative leaders had to plow tens of thousands of dollars into their budgets when more than a dozen older lawmakers retired the year before and, understandably, opted for the state to pay their health care premiums for the Public Employee Health Plan, the quasi-public plan that is part of the Utah Retirement System.

A Utah legislator qualifies for the retirement health care benefit in two ways:

• He stays in office up to the age of retirement and has four or more years in office.

• He leaves office before he is 62 but continues to pay the full cost for PEHP-offered health care insurance out of his own pocket.

The cost for an out-of-office, non-retired legislator is steep, between $849 and $789.50 a month for a family's coverage, said Linn Baker, head of PEHP.

"But you get a great health care plan, and it may be worth it" for a former legislator who is approaching retirement age, or for some medical reason is unable to get health insurance in the private sector, Baker adds.

If a former legislator with 10 years in office is on PEHP at the time of his retirement, then the state starts picking up the health care premiums for the rest of the lives of the former legislator and his/her spouse.

The state provides its workers, including part-time lawmakers, with a good health care plan, heavily subsidized by state tax dollars.

The high-end plan costs state workers just $713.18 a year, the cheapest just $189.54 a year, Baker said. The state's costs for those plans are, respectively, $10,188 and $9,474 annually.

Of the current 104 legislators, all but eight have signed up for one of the state's health care plans. And two of those eight have spouses who already had PEHP coverage through their public-sector jobs, so the legislator was covered by the state's plan before taking office.

If those 98 current legislators all retired while in office — a big "if" because most won't be in office when they reach 62 — it would cost the state about a half million dollars a year in health insurance premiums for those retirees. If insurance costs continue to escalate, Utah taxpayers will pay even more over the length of the retirees' benefits.