Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Employee Benefits topic
No spam. Unsubscribe anytime.
Commission moves to limit future retiree health subsidies for employees hired on or after July 1, 2025
Summary
The commission approved a resolution changing eligibility for the city-sponsored retiree health plan, restricting retiree health insurance and city subsidy for employees hired or rehired on or after July 1, 2025. City officials said the change is intended to control long-term OPEB costs.
The Hobbs City Commission approved a resolution Tuesday to limit future eligibility for the city-sponsored retiree health plan, prohibiting entrance and city-paid subsidy for employees hired or rehired on or after July 1, 2025.
Nicholas Goulet, the city’s human resources director, told the commission the measure will not affect current retirees or currently employed staff who already meet eligibility rules. “Tonight's proposal doesn't in any form or fashion affect our current retirees or their subsidy amounts as they sit today,” Goulet said.
Why the change Goulet said the city’s other post-employment benefits (OPEB) liability is sizeable and rising. He cited an OPEB valuation — discussed as part of the presentation — of about $27,600,000 and said annual claims and administrative costs for retirees run roughly $2,000,000. He said the proposal would place a cutoff so the city does not add future retirees to the program and thereby seeks to control long-term costs.
Background and mechanics Goulet reviewed the resolution’s history: the city opted out of the New Mexico Retiree Healthcare Act in 1990 and implemented its own retiree healthcare program in 1991. The program was revised in 2008 (a 30% subsidy cap) and again in 2011 (changing to a tiered multiplier based on years of service: 2% at 20 years, 2.5% at 25 years and 3% at 30 years). The current action repeals and replaces Resolution No. 56-40 to restrict new entrants hired on or after July 1, 2025.
Commission action and vote Commissioner Fields moved to approve the change; Commissioner Girth seconded. The resolution passed unanimously.
What was not changed Goulet emphasized the policy does not reduce benefits for current retirees nor deny currently employed staff the ability to earn retiree health insurance under the existing rules if they meet retirement eligibility before the cutoff date.
Ending City staff said the measure is intended as a long-term strategy to manage retiree health costs and protect current retirees’ benefits.
