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Hyattsville staff recommends closing retiree health plan to new hires while protecting current retirees
Summary
HR presented recommendations to grandfather current retirees and employees, continue city contributions up to 70% for covered retirees, and close the retiree health benefit to employees hired on or after July 1, 2026; staff projected modest five-year savings and emphasized coordination with Medicare.
City HR staff presented a final recommendation on June 8 to preserve retiree health benefits for current retirees and employees while closing the plan to future hires, a proposal the city says will lower long-term liabilities.
Jay, speaking for the HR team, said the recommendation rests on two pillars: "honoring our commitments" by grandfathering all current retirees and employees so their contributions and benefits will not change, and "establishing a sustainable benefit for future workforce" by closing the retiree health benefit to employees hired on or after July 1, 2026. Jay said the city will continue to contribute up to 70% toward retiree premiums for eligible retirees, spouses and dependents and that Medicare coordination will reduce city premiums as retirees reach Medicare eligibility.
Jay provided cost context: "Our net annual city cost is approximately $384,000," he said, and he stated that the five-year cost under current plans would be "over $3,000,000," with projected savings under the recommendations of about $450,000 over five years. He described implementation steps including an annual coverage attestation for retirees, setting the city contribution to the lowest-cost qualifying plan beginning FY2028 for future retirees, and clear communications and annual reports to the council.
Council members thanked HR and the work group for analysis and said they will review the recommendation for formal action at a future meeting. No final council vote was taken during the June 8 session.
What happens next: staff will prepare draft ordinance or resolution language and additional communications and return to council for formal adoption if the council chooses to proceed.
