Governor M. Jodi Rell and Comptroller Nancy Wyman today announced that the state employee retirement plan’s application to the Early Retirement Reinsurance Program (ERRP) has been approved by the federal government – meaning Connecticut taxpayers will see a significant savings of as much as $30 million a year.
“This $5 billion federal program helps employers – including the State of Connecticut – pay benefits to workers between the ages of 55 and 65 who opt for an early retirement,” Governor Rell said. “Under the 2009 agreement I negotiated with the state employee unions, we saw more than 3,850 state employees take early retirement. This program will pay up to 80 percent of annual claims between $15,000 and $90,000 – and that could mean a major savings to taxpayers every year through 2013, as long as Congress continues to fund the program.
“I want to congratulate Comptroller Wyman and her office on the excellent application she submitted to the U.S. Department of Health and Human Services,” the Governor said. “The HHS approval of this program is a significant gain for Connecticut.”
Comptroller Wyman said her agency proactively sought out the funding program as part of her continuing effort to find forward-thinking ways to lower the state’s overall health care expenses.
“Cutting the state’s health care costs is one of the major ways government can reduce the budget burden on taxpayers,” Wyman said. “This program is a great example of what can be done when state government keeps its eye on the ball and maximizes the use of federal funds.”
Under the ERRP rules, the state can only use the federal reimbursements to reduce premiums, health benefit costs or other costs incurred by the state or plan participants; the money cannot be applied directly to the General Fund. However, retiree health expenses are themselves a significant part of the overall budget.
Additional guidance about the program is expected from HHS in the coming weeks.
