CONCORD – New Hampshire’s adoption of a groundbreaking plan to allow local, county and state employee groups to set up medical trust funds for retirees has attracted national interest.
The National Retiree Healthcare Summit in Washington D.C. has asked Senator Harold Janeway (D-Webster) to attend a conference in December to talk about New Hampshire’s efforts.
“Such an initiative is exceptional and highly noteworthy,” Senior Conference Manager Alec Moore wrote in his invitation to Janeway. Moore noted that New Hampshire is the first state in the nation to adopt retiree medical trusts as a way to manage retiree health care costs.
The state Senate this year voted unanimously to endorse this effort, which grew out of the work of the Commission to Propose a Retiree Health Care Benefits Funding Model that Janeway led.
“This is somewhat analogous to a health savings account,” Janeway explained. “Employee groups can create these medical trust funds to provide benefits in their retirement. It does not cost the employer, though employers can agree to contribute. Everyone benefits because of how these funds are treated under our tax laws.”
Employee groups that decide to set up such a fund have each worker contribute a designated sum to the fund during their working years, either from regular payroll or from the transfer of sick leave or vacation time. Employers also can agree to make contributions. Contributions into the fund are not taxed, nor would benefits paid out of the fund.
The money can be used after employees retire to offset the costs of health insurance or medical expenses. How the fund is used would be determined under the employee group’s collective bargaining agreement. It is not considered a defined benefit.
“New Hampshire is leading the way again with some very creative thinking and I’m delighted that our state and our own Senator Janeway are getting national attention for this innovative approach,” said Senate President Sylvia Larsen (D-Concord).
Janeway will be traveling to Washington D.C. to speak before a group of public and private sector employers who deal with issues around retirement benefits. The conference runs from Dec. 7-9.