Time is of the Essence for Retirement-Eligible State Employees

By Peta Richkus.

Subsequent to publication of Ms. Richkus’  Commentary in Maryland Matters and The Daily Record, the MD State Retirement Agency (SRA) removed all reference to SB 946 from its web page (a Search for “SB 946” currently yields no results). The Department of Budget & Management (DBM) link to expanded SB 946 information can be found at the top of the DBM Home page. However, critical information is still two clicks away at a “Retirement Related Questions” link. The bottom line – For current employees to be eligible for the Maryland State Retiree Prescription Drug Coverage Program you must be off the payroll prior to your effective date of retirement, no later than November 30, 2019.  It’s quite alarming to see that DBM appears to have taken the posture that they could defer everything associated with the SB 946 Retiree Prescription Drug Coverage Program to await the adjudication of Fitch v. Maryland. There is no mention of any thought given to the December 31, 2019 eligibility cut-off for retirement-eligible employees in DBM’s 7/15/19  required ‘report‘ to Governor Hogan, Senator King, Delegate McIntosh, Senator Griffith, and Delegate Barnes. 

Two things happened the first week of September affecting thousands of State of Maryland retirement-eligible employees and tens of thousands more State retirees.

First, the MD Department of Budget and Management (DBM) sent a certified letter, dated September 1, 2019, to State retirees and retirement-eligible current State employees that raised more questions than it purported  – and failed – to answer about the new law covering prescription drug benefit programs for the State’s Medicare-eligible retirees.

There is an immediate dilemma facing retirement-eligible current State employees, the majority of whom can expect to be affected by the new law – SB 946: “State Prescription Drug Benefits – Retiree Benefits – Revisions.” While implementation of the new law has been stayed by preliminary injunction while a legal dispute, Fitch et al v. State of Maryland et al, is being adjudicated, retirement-eligible employees may be eligible for what would then be a reduced benefit – as opposed to  a ‘zero’ benefit – but only if they are retired by the end of the year. How exactly “retirement by December 31, 2019” can be accomplished to meet both the requirements of the new law and the State’s personnel procedures is not as simple as it might seem. The DBM letter contains contradictory information and the guidance from the State currently available online lacks a specific road map or timeline to meet the deadline.

Retirement-eligible State employees need to be proactive to identify their options and in considering to retire or not. The effective deadline (to file the necessary paperwork), by some calculations, is the end of September.

As to the second item, U.S. District Court Judge Peter J. Messitte, who issued the preliminary injunction in October 2018 halting the State’s termination of its retirees’ prescription drug plan, issued a new ruling in Fitch v. Maryland on September 5th that sends both sides back to square one in order to respond to the passage of SB 946.

Judge Messitte has required a written description to clarify the current confusion regarding exactly how State employees who want and are eligible to retire before the December 31, 2019 deadline are to do so. Judge Messitte’s order also stipulates: (1) the plaintiffs are to file an amended complaint challenging the new law, SB 946, within 90 days; and (2) all motions submitted in the case to date are moot, including the plaintiffs’ request for class certification as well as a separate motion to intervene to oppose certain aspects of the request for certification submitted by the plaintiffs.

State of Maryland retirees and current employees hope that justice will ultimately prevail and that the prescription drug benefits that were promised as part of their compensation will be reinstated. Thanks to Judge Messitte’s insight and his preliminary injunction, these benefits are continuing – for the time being.

As to the dilemma facing retirement-eligible State employees  –  most but not all of the 7,000 or more State employees who can be expected to retire this year need to understand that SB 946 might be beneficial for them. They should contact the State Retirement Agency as soon as possible to learn exactly how to meet the eligibility requirements for SB 946 and how each of the three provisions of the new law would apply to them.

They should also tell their State representatives that the State needs to provide all the information needed for employees to make informed decisions about their prescription drug insurance options, and in order to evaluate the pros and cons of retiring before the end of 2019.

A resident of Towson, Ms. Richkus was MD Secretary of General Services, Jan 1999 – Jan 2003, and Commissioner, Port of Baltimore, MD Port Administration, July 2008 – January 2014.

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