KASS Urges Senate to Pause on HB 694

We urge the Senate to NOT move HB694 during the short session and allow a collaborative process with public education stakeholders during the interim. This will honor the collaborative process that made HB540 of 2010 a success by ensuring all stakeholders have adequate time to review, understand, and provide feedback on the proposed changes before any vote occurs on HB694. The strength of the original legislation came from its inclusive approach—let's maintain that proven tradition of shared responsibility.

We respectfully request the Kentucky General Assembly provide stakeholder feedback and input prior to final passage on HB694 that proposes changes to the Teacher Retirement System Medical Insurance Trust Fund (MITF) and the “Shared Responsibility” Plan approved in HB540 of 2010. We believe this will be best discussed during the interim since the MITF is several years from full funding.

The 2010 House Bill 540, known as "Shared Responsibility for Retiree Health Insurance," stands as a model of effective legislative collaboration. This landmark legislation succeeded precisely because it brought together all affected parties—legislators, school districts, and certified employees—to develop a sustainable solution.

According to TRS projections, the MITF is only 3-4 years away from reaching 100% funding—clear evidence that the original collaborative approach is working as designed. This funding status provides ample time for thorough stakeholder review of any proposed changes.

The current proposal makes significant departures from the original shared responsibility framework of HB540 of 2010, yet affected stakeholders have had minimal opportunity to:

• Fully understand the financial implications of the proposed changes
• Provide informed feedback on potential unintended consequences
• Suggest possible refinements that maintain the collaborative spirit of the original legislation

We ask that the General Assembly:

1. Pause consideration of HB694.
2. Convene meetings with all stakeholder groups who participated in the 2010 solution.
3. Provide detailed analysis of how the proposed changes would affect the long-term stability of the fund and those groups contributing to its funding and any possible legal implications for shifting district funding from the MITF to the TRS Pension.
4. Allow a reasonable comment period for affected parties to respond.
5. Consider clarification that the normal costs to maintain the MITF will be continued upon achieving full funding (100%) which is currently 2.01%.
6. Consider reducing employee contributions to 2.01 upon full funding to the MITF which would result in a reduction of 1.74% from the current level of 3.75%. As an example, a teacher making $50,000 per year would get $870 back into their salary adding another step in improving the earnings of our educators to help recruit and retain high quality professionals working with and around our students. 

We believe that we are better when we work together to find common solutions to these issues and are better able to serve our students, teachers, school districts, and the Commonwealth with an approach like this.