The new health care benefits would provide the state employees with money to help cover insurance premiums and other health care costs. Under the new plan, the state would make annual payments to the account for each employee or elected official, depending on their age.
According Senate President Pro Tem David Long, the increase in health benefits may allow some state employees to retire earlier, rather then continue to work just to hang on to health insurance.
The payments to the accounts would range from $500 for those aged less than 30, to $1,400 age 50 or over. For the next 10 years, employees who retire with at least 15 years of service, or elected officials who have served for at least 10 years, would get “catch up” payments of $1,000 for each year of their service, the AP reported. That provision would help those who retire before having time to build a balance through annual contributions and would expire in 2017.
The payments could also supplement Medicare
coverage when the employee reaches age 65.
The plan will cost an estimated $55 million in the first year (2008), and then drop by about 40% after 10 years, partly because if an employee leaves their job before retirement, they would lose the money in their account and it would be directed back into the state fund, the wire service reported.