Over the past several years, the State Employee Benefits Committee (SEBC) and the Retirement Benefits Study Committee (RBSC) held many public meetings to study unfunded State retiree healthcare costs and found that under the current state pensioner healthcare plans, vesting schedules, and funding models, the retiree healthcare trust fund is underfunded and fiscally unsustainable.

On December 31, 2022, the previous five-year Medicare Special Medicfill Supplement contract expired. In early 2021, the SEBC competitively bid the administration of the State Group Health Insurance Plans offered to State employees, non-Medicare and Medicare retirees. In early 2022, the SEBC awarded a contract to Highmark Blue Cross Blue Shield Delaware to provide Medicare retiree healthcare under a full replacement Medicare Advantage plan, beginning January 1, 2023.

Following a legal challenge, on October 19, 2022, Superior Court Justice Calvin Scott issued an interim ruling and order to halt the implementation of the Medicare Advantage Plan. Following the October 19, 2022 opinion and order from the Superior Court, the State negotiated with Highmark Blue Cross Blue Shield Delaware to extend the previous Medicare Special Medicfill Supplement plan until January 1, 2024. SB 29, signed by the Governor, created the Retiree Healthcare Benefits Advisory Subcommittee (RHBAS), a subcommittee of the SEBC, to conduct public meetings and engage public comment about current and future State retiree healthcare benefits, while taking into consideration the previous work of the SEBC and the RBSC. On April 24, 2023, the SEBC voted to further extend the expired Medicare Special Medicfill Supplement plan for an additional six months through June 30, 2024. On May 1, 2023, the RHBAS issued an initial report to the Governor and the General Assembly, stating that due to the SEBC Medicfill extension through June 30, 2024, there would not be an impact to the Fiscal Year 2024 State operating budget. On September 18, 2023, the SEBC voted to further extend the Special Medicfill Medicare Supplement plan through December 31, 2024. The RHBAS is expected to issue its findings and recommendations in 2023. Additional details about the RHBAS, including materials from recent meetings, can be found on the SBO website here: https://dhr.delaware.gov/benefits/sebc/index.shtml.