The public employees' association is misleading the public and public employees about HB 213. The association says that the legislature is stealing benefits from hardworking public employees the benefits they have accrued. Our public employees are hard working and have gone without pay raises for too long, but HB 213 is not an attempt to steal their benefits; rather it is meant to address an IRS ruling that threatens the way benefits are taxed.
The state is looking at restructuring post-employment benefits because it has to.An IRS ruling threatens to change the way these benefits are taxed. This means we must look at the issue. HB 213 does not effect employees that have already retired. Nothing will change for these people. This bill only affects current employees.

Currently, upon retiring, public employees have the option of taking some amount of eligible accumulated sick leave in cash (up to 25% of the value). The rest goes to health insurance (1 month for every 8 hours). Under HB 213 accumulated sick leave still converts to health insurance at the same rate (1 month for every 8 hours). The difference is in the 25% that they now are able to get in cash. The IRS rule requires that this amount be paid into a 401K.

This means 25% of the value of accumulated sick leave will go into a 401K, and the rest can still be converted to health insurance (1 month for every 8 hours). No benefits are gained or lost, all earned benefits remain, though the IRS is requiring the legislature to change how an employee will receive them.

Future benefits an employee accumulates, beginning after January 1, 2006, will be distributed upon retirement in a similar fashion. Twenty-five percent (25%) of the value will go into a 401K. The remainder will go into a medical reimbursement plan, an account from which medical expenses or insurance can be paid. The amount of money in that account will be the amount of the employees retirement wage multiplied by the number of hours of unused sick leave she/he accumulate after January 1, 2006.

The January 1, 2006 date only changes the way unused accumlated sick leave is disbursed to an employee upon retirement. Everything accumulate before January 1, 2006 will be disbursed in the formula of 25% to a 401K and the rest to health insurance (1 month for every 8 hours). Unfortunately, the employee’s association is perpetutating the rumor that an employee must retire to keep those benefits. That is wrong, no benefits are lost, the IRS just requires they be distributed in a different, but equal, fashion.