RENSSELAERVILLE — Not long after the town of Rensselaerville learned that it is paying more than it had anticipated in retiree benefits, the town’s insurance agent Erin Nevins laid out a preliminary path for cost-savings beginning in 2025.

That year, Nevins explained at the town board’s Dec. 28 meeting, Medicare rules will change to limit out-of-pocket drug expenses to $2,000 per enrollee, regardless of their particular plan. 

She said that, because of that impending change, the town of Greenville, a client of hers, “had opted to … just give [retirees] a fund and allow them to go out and pick what was right for them, and they’ve saved money just by doing that.”

“I feel like that would be a good option for Rensselaerville, but for 2025,” Nevins said, “because … you won’t have to put up as much fund for these people because they’d be limited to $2,000 at that point anyway.” 

She concluded by saying that the change would give the town the ability to preserve retirees’ benefits “but save a substantial amount of money.”

Last month, Supervisor John Dolce told the board that, although the board had been discussing Medicare reimbursements of up to $2,200 per person, the actual benefits cost $7,900. 

Nevins said at the Dec. 28 meeting that retiree costs are ballooning for many employers, far beyond the levels that existed when the commitments were made. 

“They became so expensive at this point that retiree costs are far outpacing the active employees’ costs, and now, people can’t hire new hires because they’re spending all their budget money on retiree benefits,” she said. 

Larger employers like school districts and big companies “have changed their retirement programs for future hires,” Nevins went on, adding that they “can’t really do much about their past retirees to kind of stop the hemorrhaging, if you will.” 

Rensselaerville is on track to do the same as it revises its employee handbook, Councilman Brian Wood said. 

Explaining that a full discussion would wait until the town’s next meeting, Wood said that there’s “an extensive overhaul of how we pay the health insurance … which essentially is going to eliminate that Part B reimbursement for anybody hired after the first of the year 2024,” though there will be incentives for long-time employees.

Medicare’s Part B covers necessary and preventive services. Prescriptions are covered under Part D. 

“Currently,” Wood said, “we can have somebody start here at 21, when they can get their [commercial driver’s license] and leave by 36 and go work for a private contractor making three times as much money, probably, but without the crappy health care because they can take their benefits” from the town.

He encouraged Nevins to weigh in on the proposed changes.

Wood also said that Part B reimbursements would be preserved for retirees in the manual, after Nevins had alluded to the fact that the town had learned that, despite providing these benefits since the 1970s, there was no record of a formal authorization. 

Twenty retired employees and spouses receive health benefits through the town.

Those reimbursements, Nevins said, “are standard practice across almost all the towns around.”