Delaware Governor John Carney signed a series of bills on Monday aimed at ensuring the long-term sustainability of health care benefits for state retirees.
The bills, recommended by the Retiree Healthcare Benefits Advisory Subcommittee (RHBAS), continue efforts to strengthen the State’s Other Post-Employment Benefits (OPEB) Trust Fund, which is used to pre-fund retiree health care.
The legislation builds on previous efforts from the 152nd General Assembly, prioritizing funding for the OPEB Trust Fund. Gov. Carney also announced that he will allow House Bill 377 to become law without his signature, despite concerns about its potential limitations.
“For decades, the State has funded retiree health care on a ‘pay as you go’ basis, which we know isn’t sustainable,” Gov. Carney said. “The legislation I signed today creates a path toward a long-term solution. Future Governors and General Assemblies will need to continue following this roadmap to solve our OPEB challenges.”
In 2019, Carney established the Retirement Benefit Study Committee (RBSC) through Executive Order #34. The committee recommended a three-prong approach to reducing the state’s retiree health care liability: increasing OPEB funding, adjusting retiree health plans, and changing benefit eligibility for future retirees. These recommendations informed the legislative package signed this week.
The bills signed include:
- House Bill 330: Requires the General Assembly to allocate 0.50% of annual payroll in the Fiscal Year 2026 budget for the OPEB Trust Fund. This percentage will increase incrementally by 0.25% each year until the fund reaches the required level.
- House Bill 375: Changes the schedule for new hires to qualify for state-subsidized retiree health care premiums.
- House Bill 376: Requires pensioners hired after January 1, 2015, to coordinate benefits with any health coverage they receive from other employers.
While the governor will allow HB 377 to become law without his signature, he voiced concerns about the bill’s constraints. The bill requires the state to continue offering retirees hired before January 1, 2025, a health care plan comparable to the current Medicare Supplement plan.
Carney encouraged lawmakers to continue working toward reforms that ensure the sustainability of retiree health care benefits while addressing the state’s broader financial priorities.
