Session Bill Report

2023 WSSRA END OF SESSION BILL REPORT

The Washington State Legislature has adjourned for the 2023 Legislative Session. The Governor’s bill action – signatures and vetoes – is also complete.

Legislators examined thousands of bills and amendments. Many would touch on the lives of seniors. This report examines legislation affecting pensioners and retirement income (PART A), senior healthcare and insurance (PART B), and other miscellaneous legislation of interest for older Washingtonians (PART C).

Thank you for your advocacy this past legislative session. Citizen input has a tremendous impact on legislation.

PART A – Pension Legislation

One-Time 3% Plan 1 COLA – Senate Bill 5350

The Legislature unanimously approved a Plan 1 COLA for 2023. Starting in July ’23, TRS 1 and PERS 1 retirees – provided they have been retired a full year – will receive a 3% increase up to $110 per month. The legislation also required the Select Committee on Pension Policy to study the implementation of a permanent, automatic COLA for Plan 1 retirees.

2023-2025 Operating Budget –Senate Bill 5693

Retiree organizations were pleased with the 2023-2025 operating budget. It provided several positive benefits to school retirees. The legislation:

·       Made the actuarially recommended pension payment to the pension funds and maintained a $250 million buydown of the Plan 1 unfunded pension liability.

·       Funded the Plan 1 COLA for 2023.

·       Maintained the $183 monthly benefit for Medicare Eligible PEBB participants.

·       Maintained and increased Plan 1 minimum benefits. The pension floor for Plan 1 retirees in increased to approximately $70 per month, per year of service credit.

Retirement System Funding – Senate Bill 5294

SB 5294 smoothed the Plan 1 pension contribution rates so TRS 1 and PERS 1 pension plans will funded at 100%, but will not become overfunded. WSSRA opposed this legislation in its original form; however, it was amended in ways that made the bill beneficial. Adequate pension funding was one of WSSRA’s original goals in 1947 and retirees are still fighting the good fight.

Equalizing Plan 2/3 Health Benefits – House Bill 1008

Since the creation of TRS/PERS/SERS Plan 3, there has been unequal access to PEBB retiree insurance. As a carrot to join Plan 3, a separation of service with a health benefit deferral was offered. Plan 2 retirees were only given a take it or leave it option for their retiree health insurance. House Bill 1008 equalized and improved Plan 2 so all retirees can defer their PEBB coverage if they separate from public service without immediately drawing their pension.

Equalizing Post Retirement Employment – House Bill 1056

Certain early retirees under age 65 have not been eligible for return-to-work opportunities. While school employees generally are allowed at least 867 work hours per year, many state agency and local government employees were not allotted the same privileges. It resulted in retirees losing pension benefits due to receiving small stipends for working at state fairs or other inconsequential employment. House Bill 1056 establishes that all retirees may work up to 867 hours without losing benefits. Most school employment can be up to 1040 hours. Employment in the private sector or in federal service is not calculated against the hourly cap.

Pension Self Insurance Fund – Senate Bill 5084

A technical bill requested by the of the Department of Labor and Industries, a self-insurance fund is now set up by the Washington State Treasurer. The insurance fund covers pensions, L&I funds, and other accounts. Excess premiums may be invested by the Washington State Investment Board.

Permanent, Automatic Plan 1 COLA – House Bill 1294

House Bill 1294 by Representative Steele would set up a permanent, annual COLA for PERS 1 and TRS 1 retirees. The benefit would be up to 3% annually. HB 1294 did not receive a public hearing and died in the House Appropriations Committee.

Permanent, Automatic Plan 1 COLA – House Bill 1459

This bill by Representatives Stokesbary and Ormsby would also have created a permanent, automatic COLA for PERS 1 and TRS 1 retirees. This legislation fiddled with investment assumption returns as a means for paying for the Plan 1 pension enhancement. This legislation received a public hearing, but also died in the House Appropriations Committee.

PART B – Healthcare Legislation

Creating The Profession of Dental Therapy – House Bill 1678

The State of Washington is in the process of licensing a new dental profession titled Dental Therapy. A dental therapist would have the equivalent of a Bachelor of Science in Dentistry – a step in-between hygienists and dentists. These individuals would be able to fill coverage gaps in rural and lower income areas of the state.

Local Governments & PEBB Participation – House Bill 1804

Participation in PEBB health insurance is mandatory for state agencies but optional for local municipalities and special districts. HB 1804 allows local governments that have unenrolled from PEBB for new employees to continue PEBB coverage for grandfathered employees and retirees.

PEBB Retiree Insurance Access – Senate Bill 5490

Rules regarding PEBB retiree coverage are strict. Coverage must start at the time of retirement, or deferral paperwork must be submitted at the time of retirement. SB 5490 allows limited exemption from these rules if a member fails to file paperwork but had filed a formal appeal prior to December 2022.

Hearing Aids for Public Employees – House Bill 1222

This legislation stipulates that health plans offered to public employees must offer a hearing aid benefit of at least $3000 every 36 months.

Insulin Cost Sharing Cap – Senate Bill 5729

Previous legislation created a cost sharing cap for insulin medications. First to $100 per month, then to $35 per month. This legislation was set to expire on January 1, 2024. Senate Bill 5729 eliminated the expiration date. The capped $35 monthly insulin payments are now permanent.

PART C – Other Senior Citizen Legislation

Senior Citizen Jury Service – House Bill 1312

Jury excusals for health and old age are not consistent across Washington state. Some districts provide ample excusals and others require a physician’s notice. This WSSRA sponsored bill – requested by the Thurston County School Retirees – creates a statewide standard. Seniors over age 80 can explain they have a medical condition via writing and the court is required to honor that excusal request. The court system is required to create a standardized form to simplify the process.

Income Limits for Public Housing – House Bill 1046

Public housing has historically been income limited to those with incomes at 50% of the median household income level. HB 1046 changes that policy, so those with incomes up to 80% of the median household income can access public housing services.

Robocalls and Telephone Scams – House Bill 1051

Enhances enforcement of the Do Not Call Registry. Phone calls initiated to those on the registry can result in a fine of $1000 per call. Membership organizations contacting their membership are exempt.

Middle Housing Legislation & Increasing Urban Density – House Bill 1110

HB 1110 provides a comprehensive update to the Growth Management Act. Cities with a population of at least 25,000 residents must allow a minimum of two residences per lot. This includes duplexes, mother-in-law units, and detached housing. Lots within one quarter mile of a rapid or high-capacity transit system must allow for a minimum of four residential units per lot. Cities with populations over 75,000 residents must allow for a minimum of four residential units per lot.

Medicaid Personal Needs Allowance for Long-Term-Care – House Bill 1128

Medicaid recipients receiving long-term-care are required to cost-share for their services. State law allows nursing home patients to retain $75 of their resources per month for personal needs. Those receiving care at home can maintain $2,742 of their resources for personal needs. HB 1128 increases the Personal Needs Allowance to $100 for long-term-care patients and makes future inflation adjustments automatic.

Low Income Housing Rehabilitation Grant Fund – House Bill 1250

HB 1250 changes the Low-Income Home Rehabilitation Revolving Loan Fund to the Home Rehabilitation Grant Fund. It will provide grants of up to $50,000 for home rehabilitation to certain qualified individuals. Low-income seniors are included as a priority group for grants.

Utility Shutoffs in High Heat – House Bill 1329

State law prohibits utility companies from shutting off power to a residence during the winter. To apply for this benefit, a resident must contact the utility company and express a lack of ability to pay. The resident must set up a payment plan. HB 1329 expands the law and limits a utility company’s ability to shut off power and water during droughts or extreme heat.

Senior Property Tax Exemption – House Bill 1355

Low-income seniors and disabled individuals are eligible for property tax exemptions, reductions, holds, and deferrals. HB 1355 increases the eligibility thresholds for each category. Income eligibility is as high as $77,000 per year in high income counties.

Senior Living Meals and Taxes – House Bill 1431

Meals provided in long-term-care and senior living facilities are now available tax free. Business taxes on providing meals in senior care facilities are reduced.

Relocation Assistance for Mobile Homeowners – House Bill 1771

Low-income owners of mobile homes are eligible for relocation assistance if their mobile home park is closed or sold. HB 1771 extends the length of time to apply for assistance. It is expanded to 90 days of the closure and 1 year to complete movement of the home.

Mobile Home Community Sales – Senate Bill 5198

Current law requires mobile home park operators to give tenants 3 years notice when intending to close a mobile home park. SB 5198 reduces that requirement to two years. If financial assistance is provided for relocation, the time warning may be reduced to 1 year. Additionally, tenants must be given an opportunity to purchase the park.

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2022 End of Session Bill Report

The 2022 Washington Legislative Session adjourned on time in March and Governor Inslee has concluded his post session signings and vetoes. Legislators made changes in multiple policy areas including policing, health, transportation, agriculture, environment and ecology, housing, and passed the largest supplemental budget in state history. Budget writers also had to dispense with billions in federal Covid-19 and infrastructure funding. That said, this report will focus on legislation pertaining WSSRA’s issues of interest: pensions, healthcare, and senior citizens’ issues. Like 2021, the 2022 Legislative Session was dominated by Covid-19. Constituent contacts and committee hearings occurred online.

PART A – PENSION LEGISLATION

One-Time 3% Plan 1 COLA – Senate Bill 5676

The Legislature unanimously approved a Plan 1 COLA for 2022. Starting in July ’22, TRS 1 and PERS 1 retirees – provided they have been retired a full year – will receive a 3% increase up to $110 per month. This does not apply to Plan 1 retirees receiving minimum benefits. For information on Plan 1 minimum benefits please see Senate Bill 5693 (next paragraph).

2022-2023 Supplemental Operating Budget – Minimum Benefits and Medical Subsidy – Senate Bill 5693

The 2022-2023 supplemental budget was the largest in Washington state history. Record tax collections in conjunction with billions in federal spending allowed legislators to spend $64 billion this cycle. Within the budget is important law for retirees. The budget bill made the actuarially recommended pension payment to the pension funds and maintained the $800 million buydown of the Plan 1 unfunded pension liability. It also maintained the $183 monthly benefit for Medicare Eligible PEBB participants. The budget made no changes to Plan 1 minimum benefits, so any Plan 1 member at the minimum benefit level of $65 per month per year of pension credit will receive 3% cost of living adjustment.

Plan 2/3 COLA – Current Law, No Bills

Retirees in TRS 2/3, PERS 2/3, and SERS 2/3 will receive 3% COLAs in July 2022. No legislation was sponsored to change this automatic Cost of Living Adjustment for Plans 2/3.

Plan 2/3 retirees are also eligible for inflation banking. The official Department of Retirement Systems inflation rate for 2021 was calculated at 4.75%. Therefore, Plan 2/3 retirees will save 1.75% in the inflation bank to be used for a COLA in future years.

Increasing Work Hours for Retirees – House Bill 1699

Since 2007 the rule has been 867 hours per year for retirees working in DRS participating employers. Due to the emergency substitute teacher shortage, legislators passed HB 1699 to increase the number of hours to 1040. All positions are eligible except administrative jobs in larger districts. The change expires in 2025. If you have any questions, WSSRA has created a chart explaining limitations for different retirees. Simply contact the office and we can email it to you.

Adding a ROTH Option to Deferred Compensation – House Bill 1752

Washington State Deferred Compensation is an effective retirement savings plan for state, local government, and school employees. However, all options currently available have been pre-tax. The ROTH option bill will allow employees to set aside taxed savings now, but not in the future when the member is drawing retirement income. The new program will be in place by December 2023.

Lump Sum Payment to LEOFF 1 Retirees – Senate Bill 5791

SB 5791 provides a lump sum payment to Law Enforcement and Firefighters Plan 1 retirees. The payment is $100 per month of service credit. The payment will be distributed in January 2023. Washington State Patrol pension credit is not eligible.

Pension Enhancement and Lump Sum Payment to LEOFF 2 Retirees – House Bill 1701

HB 1071 provides separate benefits for active and retired members of Law Enforcement and Fire Fighters Plan 2. Current LEOFF 2 members will receive an enhanced pension formula: years 15-25 of service will be calculated as Average Final Compensation X 2.5% of salary, an increase from AFC X 2.0% of salary. Retired members will receive $100 per month of service credit as a lump sum payment in January 2023. Washington State Patrol pension credit is not eligible.

Public Safety Employees Retirement System 2 Disability Improvements – House Bill 1669

Members of PSERS 2 serve in dangerous correctional and mental health institutions. The Plan had a notoriously poor disability benefit program, especially for a high-risk employee group. HB 1699 improves the disability benefit to 70% of the disabled employee’s salary. A provision requires that state and federal disability payments cannot exceed 100% income replacement. The state benefit is reduced if income exceeds 100% income replacement.

Plan 2/3 PEBB Deferral Benefits – Did Not Pass – House Bill 1911

HB 1911 would have equalized PEBB deferral rights between TRS / SERS / PERS Plans 2 and Plans 3. Under current law, Plan 3 members can defer their PEBB insurance if they separate from service without drawing a retirement benefit. Plan 2 does not allow that change. HB 1911 would equalize those benefits, but unfortunately it died on the House Floor. WSSRA will sponsor this legislation again in the 2023 Legislative Session.

PART B – HEALTHCARE LEGISLATION

Prescription Drug Affordability Board – Senate Bill 5532

Starting in 2027, a new Prescription Drug Affordability Board will have authority to review prescription drug price increases exceeding inflationary costs. The Board will have authority to review confidential and proprietary information regarding drug manufacturers’ production costs. The Board will have the ability to reject unnecessary price increases and set price limits.

Hospital Care Discounts – House Bill 1616

HB 1616 expands the number of individuals eligible for hospital care charity discounts. Income thresholds are increased to 400% of the Federal Poverty Level at large hospitals and 300% of the Federal Poverty Level at community hospitals. For a married couple, discounts would be available for households with less than $55,500 in annual household income. A family of four would benefit from a household income of less than $111,000 per year.

Out-of-Network Health Services – House bill 1688

HB 1688 aligns state law with federal law to limit out-of-network surprise billing. Hospitals may not bill out-of-network provider rates for emergency services provided an in-network facilities. This is now expanded to include follow-up services, including mental and behavioral health services. The bill aligns numerous other laws associated with enforcing and facilitating the policy change.

Capping Insulin Costs at $35 per month – Senate Bill 5546

For the 2023 calendar year, insulin costs for insured individuals are $35 per month. This bill does not alter the cost charged for the medication but requires insurance companies to socialize medication costs. Uninsured individuals will not benefit from this law.

Covering Hearing Instruments – Did Not Pass – House Bill 1854

HB 1854 would have required health insurers to cover hearing aids and equipment. This bill received a public hearing (no pun intended) but did not pass the House Health Committee.

Covering Colonoscopies – Did Not Pass – House Bill 1939

HB 1939 would have required health insurers to fully cover colonoscopies if a patient has a positive blood or stool test for colon or rectal cancer. This bill received a public hearing but did not pass the House Healthcare Committee.

PART C – OTHER IMPORTANT SENIOR CITIZEN LEGISLATION

Personal Needs Allowance – Senate Bill 5745

Patients utilizing Medicare AND Medicaid and who are in long-term-care are entitled to personal needs financial allowances. Medicaid patients are required to pay part of their long-term-care costs, but this bill ensures patients my retain more than the $71 per month currently allowed. Please contact WSSRA or DSHS for more specific information.

Telephone Solicitations – House Bill 1497

House Bill 1497 restricts telephone soliciting services to the period between 8:00 am and 8:00 pm. Telephone solicitors must also disclose their purpose within the first 30 seconds of the call. If calling for charitable donations, solicitors must provide a list of donation amounts and options.

Dementia Collaborative – House Bill 1646

HB 1646 sets up the Dementia Collaborative. This institution will analyze the state’s Alzheimer’s work plan and make recommendations for future changes to improve Washington’s response to dementia. This multi-agency task force will integrate government, health, social, and emergency services.

For additional information on legislation, please contact WSSRA at (360) 413-5496