Tim Duggan, director of the Vermont Retirement Systems, told the Senate Government Operations Committee on Jan. 9 that the teachers’ retiree health plan transitioned to a new vendor effective Jan. 1, 2026, and that the change is expected to produce immediate savings and reduced contribution requests for this session.

Duggan said the office moved Medicare‑eligible and other retiree coverage to a vendor with Medicare‑advantage experience and that prior incumbent Vermont Blue Advantage no longer serves members in this plan. He reported a “rough cut” estimate of about $11,000,000 in premium savings for the year and said the change will reduce the annual required contribution (ADEC) by about $20,000,000 in the current session. He added that roughly $3.2 million of the premium savings would pass through as direct member benefit share and the remaining subsidy would reduce state costs.

Duggan acknowledged transitions of this scale create member and provider billing issues and said the retirement office is meeting multiple times per week with vendors and consultants to troubleshoot problems. He asked committee members to alert the office if they hear about service or coverage issues from retirees. "We're working through any issues," Duggan said, and the office assigned staff, including a director of member services, to respond to member concerns.

Committee members questioned whether the retirement plans were subject to Vermont’s community‑rating rules for other state insurance programs and why a Medicare‑advantage vendor was chosen; Duggan explained Medicare‑advantage plans are regulated by the Centers for Medicare & Medicaid Services (CMS) and thus operate under different federal rules than state‑regulated community‑rated products.

What’s next: Duggan said the office will monitor the vendor transition, continue regular calls with vendors and consultants, and requested that members and legislators forward any retiree problems to the retirement division’s member services team for rapid resolution. There was no committee vote on health‑plan authority or procurement at the hearing.

Speakers and direct quotes in this article come from the committee transcript and the treasurer’s office presentation.