Retirees’ health insurance benefits will continue
The Governor is, once again, calling on the Democratic leadership at the Legislature to do their job and stop with the drama that really only illustrates their failures in the financial arena.
Vice Speaker BJ Cruz wrote a letter saying “reports” indicate insurance companies will stop providing Retirees with medical, dental and life insurance benefits.
The Governor reassures retirees that they will not lose their insurance benefits.
The issue is simple:

  1. DOA Director Christine Baleto advised Vice Speaker BJ Cruz several months ago that the Fiscal Year 2016 (October 2015 to September 2016) appropriation for Retirees’ medical, dental and life insurance benefits has run out. An opinion from the Attorney General says DOA cannot pay beyond the legislative appropriation.
  1. DOA requests Vice Speaker Cruz’s assistance to get additional appropriation authority of $13.8 million.
  1. That request for help was ignored until they gave the Governor $10 millionin transfer authority as part of the Fiscal Year 2017 budget.
  1. The authority is still short by$3.8 million.
  1. Vice Speaker Cruz slashed the Fiscal 2017 budget by $55 million. Where is the Governor going to find $10 million from agencies that already dealing with skeletal budgets? This authorization was given at the end of the fiscal year that also saw a severe budget cut.
  1. The agencies Vice Speaker Cruz would have the Governor pull $10 million from include, the Department of Public Health and Social Services, Guam Behavioral Health and Wellness Center, the Department of Integrated Services with Disabilities, and other executive branch agencies/offices. (We won’t talk about how the Judiciary or Legislature are not on the list).

“I want to thank Christine Baleto for working with insurance companies to ensure they know what’s going on, thus allowing benefits for retirees to continue,” the Governor stated.
Director Baleto has reached out to insurance companies to explain the delay in payment for services rendered in Fiscal Year 2016 and the need for a Legislative appropriation that actually provides a solution.
Further, billings for services for Fiscal Year 2017, which began October 1, 2016, will be paid for.
However, the Fiscal Year 2017 budget also fails to appropriate enough to cover retirees’ medical, dental and life insurance premiums. Unless its fixed, we may be in the same situation we’re at now.
This was explained to Vice Speaker BJ Cruz and his financial team multiple times over several occasions.
“This is just another example of how Vice Speaker BJ Cruz has failed GovGuam retirees because he would not heed the warnings,” the Governor stated. “Either that or this is an orchestrated maneuver — a political ploy to play on the fears of retirees’ during an election year.”
The Governor points out that it’s the same willful ignorance that led to the passage of the hybrid retirement bill — the consequences of which are still in question.
“We are still unsure of what the impact will be to our active employees but to GovGuam as a whole. All we really know is it’s going to cost us more money,” the Governor stated. “And that’s worrisome considering how other jurisdictions all over the nation, to include Puerto Rico, are having to deal with retirement plans that placed their governments in financial jeopardy.”
In addition, Vice Speaker Cruz and Senator Mike San Nicolas reduced the retirement age for GovGuam employees. The reduction will mean more retirees and with that the cost of retirees’ medical, dental and life insurance each year will increase.
“Hopefully, those senators understand that the cost of insurance premiums will increase even more with their Legislation,” the Governor stated. “And these are real costs that can’t be addressed by phantom appropriations.”

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