Retired Canada public sector workers to pay more of health costs

OTTAWA, March 26 Wed Mar 26, 2014 12:06pm EDT

OTTAWA, March 26 (Reuters) - Retired federal workers will pay more of their supplemental health costs under an agreement with the Canadian government intended to align the public sector with the private sector, Treasury Board President Tony Clement said on Wednesday.

Retirees' contributions will rise to 50 percent of the cost of their health plan from 25 percent now. The supplement plan pays for drugs, eye-glasses and other items not covered by the general medical care plan that is free for all Canadians. Low-income pensioners will not be affected.

The government will also require six years of employment, instead of two, to be eligible.

"Updating cost-sharing ratios for the health care plan means C$6.7 billion ($6.0 billion) will be put towards fighting the deficit and returning to balanced budgets," Clement said. The savings are over a period of six years.

The broad lines of the changes had been announced in the Conservative government's Feb. 11 budget, but agreement had not been reached with the unions and retirees. The package was sweetened with some modest improvements to current benefits, including eliminating a C$60 annual deductible for single individuals and C$100 for families.

The February budget charted a return to a balanced budget in 2015, partly through savings exacted from public sector unions.

($1=$1.12 Canadian) (Reporting by Randall Palmer; Editing by Peter Galloway)

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