New changes to retirement health care plan pushing public employees to retire early

Posted: Nov 9, 2020 / 04:08 PM MST / Updated: Nov 9, 2020 / 04:16 PM MST

ALBUQUERQUE, N.M. (KRQE) – A lot of public employees in this state are looking to retire earlier than they planned to. It’s all because of a costly change to their health care.

“The first feeling I had when this happened was I felt like I was being punished,” says Diane Vallejos, Superintendent of Belen Consolidated Schools.

After working at Belen Consolidated Schools for more than 22-years, Vallejos says she wasn’t ready to retire as superintendent, and she says she knows other workers facing the same dilemma. “I do know two or three other people who are seriously considering retirement because of this,” she says.

Starting in July 2021, public employees in New Mexico who retire before they are 55-years old, will not receive the subsidized health insurance benefit from the New Mexico Retiree Health Care Authority. “The effective date of this rule change will require new retirees to have worked 25 years, or to have provided 25 years of service in order to receive the maximum subsidy that we provide,” says Executive Director, David Archuleta.

The new change applies to all public employees in the state, except law enforcement, correctional officers, firefighters, and judges. While Vallejos will have a total of 26-years of service under her belt when she retires, she hasn’t reached the minimum age to qualify for the subsidy.

That meant, the 51-year-old either had to keep working until she’s 55 or retire early now, to avoid paying more for health care. “In my case, it could be an additional $1000 a month,” she says.

Archuleta says this new change will also affect him, but he says this change was made to discourage workers from retiring early and driving up the state’s health care bill. “While unfortunate, it was critical towards being able to maintain this program over the long haul,” he says.

Vallejos says if it weren’t for this change, she would’ve worked for another three years. The state could not give us an estimate of how many people could rush into retirement to beat this rule change.