Three long-time state employees, one retired, testified in court Monday they banked on saving up thousands of hours of sick leave under a state policy that allows them to trade in sick hours for medical coverage after retirement.
The testimony was part of a multiday hearing in which the Utah Public Employees Association seeks to keep a legislative bill, which phases out the sick-leave benefit, from becoming law Jan. 1.
UPEA claims the Utah Legislature went beyond the scope of the law when it passed HB213, which would phase out the ability for some 25,000 state employees to trade eight hours sick leave for one month's worth of post-retirement medical care coverage over a five-year period. However, UPEA says changing the rules for current retiring employees constitutes an illegal taking of benefits.
State officials say while the benefit made sense when it was launched in 1981, the explosion in the cost of medical care has made it difficult for the state to keep the program going.
Attorney for the state, Clark Waddoups, said in the '80s one month of medical coverage was comparable to eight hours sick leave, which averages to about $160 per employee. But currently one month of health care is at $760 a month, making the exchange unbalanced.
But UPEA attorney Ben Hathaway pointed out that many state employees were seriously counting on that program to bridge the gap between retirement, some at 62, and when Medicare kicks in.
However, Medicare doesn't pay for much, said Terry Yockey, a 34-year clinical social worker with the Division of Child and Family Services. Yockey said he had accumulated 1,581 hours of sick leave, forgoing the temptation to call in sick for years, so he could have health insurance past 65.
Two other employees, including one said he retired early because he feared that HB213 would cut his benefits, also said they purposefully banked their sick leave for retirement medical insurance.
Waddoups took issue with employees' claim that their benefits would be lost come Jan 1. Waddoups said because the benefit is cut by one-fifth over the next five years until elimination in 2011, most employees will not lose out.
However, the complete fiscal impact on future state retirees remains confused.
UPEA Executive Director Audrey Wood testified her organization urged House and Senate leaders to call for an actuarial study of the bill before passing it. To her dismay, Wood said the Legislature passed the bill and the governor signed it without offering UPEA any information on how it would impact government employees.
To this day, Wood said legislative leaders have yet to give her any information on impact. However, they have called for an actuarial study to take place after the bill goes into effect.
Testimony will continue next Wednesday. UPEA wants to stop the bill from taking effect so they can sue the state over it. A judge is expected to rule wether or not that will happen.