Spotlight on Retiree Health Care Benefits for State Employees in FY 2015

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Other Post-Employment Benefits (OPEB) is an umbrella term that characterizes retirement benefits, other than pensions, that are offered to employees of state agencies and participating political subdivisions who meet designated age and/or service-related eligibility criteria. The most significant costs associated with OPEB benefits are for employer-subsidized health care for retired employees.

Nearly every state and most local governments provide access to health benefits to retired employees, and, in most cases, this coverage includes spouses and dependents. This report examines OPEB finances for states and state agencies and the health benefits they offer to retired employees. Key findings include:

  • Nearly every state and most local governments provide access to health benefits to retired employees and, in most cases, this coverage includes spouses and dependents;
  • Thirty-one states hold approximately $41 billion in assets to pay for future retiree health benefit costs;
  • The median state retiree health unfunded actuarial accrued liabilities is approximately $2.7 billion, and the mean average is just over $12 billion; and
  • Ten states — New Jersey, Texas, New York, California, Illinois, North Carolina, Connecticut, Pennsylvania, Florida, and Massachusetts — are responsible for $451 billion, or nearly 77 percent of the aggregate state retiree health unfunded actuarial accrued liabilities.
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