Nassau County Comptroller Howard Weitzman has called for more stringent requirements before the county provides lucrative lifetime retiree health benefits to its former employees, a change that he said would save the county millions of dollars. Currently, the county provides retiree health benefits after a minimum of five years of government service with at least one year at Nassau County. Weitzman is asking county legislators to change the law to require all new hires to have at least 10 years of government employment, five years of which must be with the county. If this vesting requirement had been in effect since 1998, the savings in health insurance costs in 2008 could have been as high as $3.4 million and $123 million over the lifetime of the retirees, he stated. Nassau County spent $227.4 million in 2007 for employee and retiree health coverage.

"Lifetime family health coverage for just one retiree will cost taxpayers approximately $624,000 over the retiree's lifetime. I believe we should reconsider the length of service required before we ask our hard-pressed taxpayers to fund a lifetime of health coverage for our former employees," Weitzman said.

The Comptroller noted his longtime concern about reducing the county's liability for lifetime retiree benefits, without negatively impacting the current workforce, if possible. As a result of a new accounting-rule change promulgated by the Governmental Accounting Standards Board known as "GASB 45," governments such as Nassau County are now required to report their estimated future liability to fund health-care benefits for retirees. In present day dollars, Nassau County's liability for all retiree health care benefits is estimated to be $3.4 billion.

"While reporting this number alone will not affect the county's budget or taxes, it does bring into sharp focus the cost to be borne by our taxpayers for our retiree health benefits," Weitzman said.

Weitzman said his proposal to change the requirements was highlighted by the recent case of Valley Stream attorney Albert D'Agostino, who was granted 21 years of retroactive pension credit in 2000 for the decades he worked as a private lawyer under a contract with the County Planning Commission. Nassau County taxpayers are paying for D'Agostino's lifetime health benefits, he said.

The Comptroller's Office identified 240 people who worked less than 10 years and left County employment between 1998 and 2008 with lifetime health benefits. Weitzman cited one instance when someone who had worked as a librarian decades earlier came to work at the county as a receptionist because she had been told that this way she could get taxpayer-funded health benefits for life. She left within 14 months of her start date with her county funded retiree health insurance. The ordinance amendment recommended by the Comptroller would close such loopholes. If the 27 people who left the county after less than five years between 1998 and 2008 did not obtain retiree health benefits, taxpayers would have saved an estimated $430,000 in 2008 and $15 million over the former employees' lifetimes, Weitzman stated.

CSEA members hired after August 2003 must work for the county for at least 10 years before they are entitled to retiree health benefits. While the Legislature cannot impose a similar change on the other county unions, Weitzman said he is recommending that the administration negotiate with its unions to adopt a limitation similar to the CSEA provision in all union contracts.

The Weitzman proposal would also eliminate another costly taxpayer-funded benefit that currently allows employees who leave the county at any age to purchase health coverage until they reach the age of 55, when taxpayers assume their health benefit costs. Under Weitzman's proposal, the county would offer retiree health benefits only to people who were vested and left the county at age 50 or older.

According to the Comptroller's Office, at present, there are 98 former employees younger than age 55 when they left the county (one was only 28 years old) who are paying to continue health benefits, thereby maintaining eligibility for lifetime taxpayer funded health benefits once they reach age 55. Seventy-four of these former employees were younger than 50 when they left county employment. It would have cost the county approximately $1 million in 2008 and $35.4 million in total to pay lifetime health insurance for employees who are vested, but under 50 years old.

"I believe it makes no sense to require county taxpayers to fund this benefit for former employees who have long left the county government," Weitzman said. "Benefits are for employees who have recently retired, not for employees who left county service in mid-career years ago."

If all these proposals had been in effect since 1998, county taxpayers would have saved $158 million over the retirees' lifetimes and approximately $4.4 million in the 2008 budget, Weitzman said. While enacting the change today for all employees hired after the legislation's effective date means the savings for taxpayers would not be immediate, savings would grow over time as employees leave the county who don't meet new vesting requirements. Since the obligation for retiree health benefits extends over an individual's lifetime, taxpayers will benefit if even a small number of people will no longer become entitled to retiree health benefits, he concluded.