After nearly 38 years working in the state system, Domenic J. Moretti, retired in June. “If I retired after September, my health coverage would cost $172 a month.”

The Providence Journal / Ruben W. Perez

Linda Folcarelli loves her state job too much to leave. But she loves her state health benefits too much to stay.

So when the General Assembly enacted a new law requiring state employees to pay more — in many cases, a lot more — for their medical coverage when they retire starting Oct. 1, she had to make a difficult choice.

Folcarelli, who is 51 and single, could wait another 5½ years to retire from her $46,600-a-year accounting job at the sate Department of Corrections and get her full pension — but pay twice as much for her medical benefits.

Or, she could get out now.

“If I was married and had a husband who had medical coverage, I’d stay,” said Folcarelli “That’s my biggest fear: my medical coverage.”

Fear over the rising costs to state retirees of their medical benefits is driving hundreds of state workers — some of whom would not otherwise have considered leaving their jobs — out the door.

About 550 state employees applied for retirement benefits from January through July –– up 156 percent from the 215 applicants during the same period last year, according to the state general treasurer’s office.

The biggest spike was in June of this year, when 299 people applied for retirement benefits. Another spike in retirement applicants is expected this month and next, as the deadline nears, said the treasurer’s spokesman, Tim Gray.

The retirements are, by definition, “voluntary,” but they don’t necessarily feel that way.

Joseph “Michael” Downey, president of Council 94 the American Federation of State, County and Municipal Employees union, which represents about 4,000 state employees, said his members are being “forced” to retire.

“If they don’t go, their health insurance [cost] when they retire increases dramatically,” Downey said. “The problem is, many of these folks were not looking to retire.”

Domenic J. Moretti is one of those people. Just 10 months ago, he was promoted from supervisor of the paint shop at the University of Rhode Island to senior construction building inspector. He got a pay raise, to $25 per hour. In addition to supervising the paint shop, his job included overseeing 4-million-square-feet of campus with 163 apartments.

But at age 57, after nearly 38 years in the state system, Moretti said, he couldn’t risk losing the benefits he’d worked so many years to keep.

“If I retired after September, my health coverage would cost $172 a month,” he said, and “the cost could go up. There’s no guarantee there.”

If he left before then, though, he could keep his medical benefits, paid 100 percent by the state.

Moretti’s last day at work was June 20.

“I came to the university when nobody wanted to work for the state,” Moretti said. “We didn’t get the pay raises, but we got the benefits.”

Government jobs traditionally have paid less than those in the private sector, but the pension benefits and the health insurance are the big draw.

Nationally, nearly all full-time employees in state and local government are offered retirement and medical benefits (99 percent and 98 percent, respectively), compared with only 71 percent for full-time workers in the private sector, according to a report released earlier this month by the U.S. Department of Labor.

Until recently, Rhode Island was 1 of 11 states that paid 100 percent of the medical benefits for state employees who retire with the required years of service before age 65, according to the National Conference of State Legislatures. The other states were Alaska, California, Illinois, Kentucky; Maine, New Hampshire, North Carolina, Ohio, Pennsylvania and Texas, according to a survey conducted in December 2006.

All those states, including Rhode Island — along with Michigan, Alabama, Delaware and Connecticut — provided 100-percent paid medical benefits for state retirees 65 or older, according to the survey.

In Rhode Island, the changes to the state retirement benefits were crafted to help staunch a state budget deficit by shaving millions of dollars off the state’s $33.3-million cost of retiree health care.

Governor Carcieri had vowed to eliminate 1,000 government jobs — mostly by not filling vacancies and voluntary retirements — by July 1. The plan, he said, would save taxpayers about $100 million.

(The number of state and local government jobs from January through the end of last month declined by 1,200, according to the state Department of Labor and Training.)

The governor’s plan to scale back retiree medical benefits was presented as a way to bring the state benefits more in line with private industry, and enable the state to set aside money to ensure it could finance retiree benefits in the future.

The savings from the early retirements will not be known until the fall, said Gray, the general treasurer’s spokesman.

“I got forced out; I didn’t want to leave,” said John V. D’Errico Jr., a 58-year-old probation and parole officer who retired June 30 from his job at the Adult Correctional Institutions. He had worked for the state for 34½ years — just six months shy of being eligible to receive 100 percent of his medical benefits paid by the state when he retired.

“It’s like running for a touchdown and you get to the ten-yard line,” he said, “and then they shut the lights off and they penalize me.”

If he’d stayed in the job longer, he would have had to pay 20 percent of his medical coverage when he retired. So he left before his 35-year anniversary, and pays 10 percent.

Linda Folcarelli is still working at her accounting job — but not for much longer. She has given her notice to leave on Sept. 26, the deadline for filing under the old benefits plan. She’ll pay 10 percent of her medical coverage, at a cost of $45.23 per month.

If it was up to her, Folcarelli said, she would have paid the 20-percent contribution toward her medical benefits — about $90 per month — and kept her job. But there was no guarantee, she said, that the cost of her contribution to her medical coverage wouldn’t go up by the time she retired.

“If they keep taking everything away,” she said, “I’m gonna have nothing left.”

Folcarelli, who helps care for her ill father, also worried what would happen if she waited to retire until the new plan took effect, and then needed to leave before she turned 59.

Under the new plan, effective Oct. 1, if she retires before she turns 59, she said, “I pay 100 percent of my medical.”

Her younger sister, Donna, also decided to retire from her job in the billing department of the state Department of Children, Youth and Families so that she could lock in her medical benefits at a rate she could afford. Donna is 49. “Neither of us are married, that’s the problem,” said Linda, laughing.

Linda has a boyfriend who is an engineer and makes “fabulous money” consulting. They’ve been together for 15 years. She’d marry him, she said, if only he had his own health insurance.

larditi@projo.com