School district officials from around the state, including in the Española School District, are concerned a change in public employee health care rules could exacerbate the already staggering number of teacher vacancies.
Currently, public employees from participating institutions pay the New Mexico Retiree Health Care Authority a portion of their annual salary so they can have affordable health insurance. After 20 years of service, they are then eligible for a subsidy that significantly reduces their monthly payments.
However, a big change will soon be made to that subsidy. Starting in 2021, employees must be 55 years old and have worked for 25 years to receive the subsidy. Firefighters, police officers and corrections officers are exempt from the new rule.
Superintendent Bobbie Gutierrez said teachers close to turning 55 will retire in the middle of next school year, so they do not have to possibly work more years than they originally planned.
“If this rule is not addressed, our state will have an educational crisis on its hands,” she said.
The Española School Board, after hearing a presentation from Gutierrez, approved a resolution Feb. 5 asking for a six-month moratorium on the new rule, so teachers will not leave in the middle of the year.
Gutierrez said she did not know how many teachers she expected to retire early over the new rule, but that it is something that concerns her.
The subsidy can save employees anywhere between $4,000 to $6,000 per year of their health insurance costs, Authority Executive Director David Archuleta said.
Lucille Holguin, president of Española-National Education Association, wrote in an email that the union does not support the rule change and would be discussing alternative options. Exactly what alternative plans are being considered is unclear, because Holguin and other Española union leaders declined to be interviewed for this article.
Holguin wrote that she did not want to be interviewed because she is “not that versed on the issues.”
The Authority was founded in 1990 as a way to provide public employees in New Mexico with affordable health care, but Archuleta said the program has struggled financially for the past decade, putting into question the long-term future of the health care program for thousands of state and local workers.
“Our financial situation is somewhat dire,” he said. “The Board has a fiduciary responsibility to make sure that this program is in existence 25 to 30 years down the road.”
The new rule, Archuleta said, has done just that, ensuring the fund is solvent for the next 25 years by limiting the number of employees getting the subsidy year-to-year. He called it a “cost-saving measure.”
“We realize this isn’t a popular decision,” he said. “However, it was one that was absolutely necessary to make sure this benefit is around for at least the foreseeable future.”
Gutierrez said she understands the Authority’s need to remain solvent, but that this new rule will only hurt teachers who will be forced to retire if they do not want to work years longer than they planned.
“On one side I can understand it, but on the other we can absolutely not lose teachers, because we are already struggling to recruit,” she said.
The problem in solvency, she said, comes from the fact that teachers are living longer and not enough people are filling the void they leave behind, leading to a natural decrease in revenue for the Authority.
Archuleta said rising health care costs also exacerbate the problem.
“Health care costs are less predictable 20 years from now than calculating what your pension will be,” he said. “In short order, we’re going broke.”
In the Roundhouse, the House of Representatives will vote on House Bill 45, which would increase the amount employees and employers pay into the Authority’s program by $22 million, along with a $12 million government appropriation, if passed. A date for voting on the bill has not yet been set.