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Dental/EHB trust

Dental/EHB trust. 2013 Spring Regionals. Effective September 2013. Existing MTS Extended Health Plan will move to the MTS/MSBA Dental Trust Both parent bodies have passed enabling motions and are in agreement with the concept Like Dental - creates a pre-tax advantage for premiums

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Dental/EHB trust

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  1. Dental/EHB trust 2013 Spring Regionals

  2. Effective September 2013 • Existing MTS Extended Health Plan will move to the MTS/MSBA Dental Trust • Both parent bodies have passed enabling motions and are in agreement with the concept • Like Dental - creates a pre-tax advantage for premiums • Opportunity for growing the Plan membership • Symmetry of Plan administration for Divisions

  3. Pre-tax Advantage • Family premiums approx. $1200 per year • If received as income, the $1200 is taxable income and the member would therefore receive only $720 as income, $480 goes to tax • Under pre-tax arrangement, $1200 is paid to the Plan as whole dollars and is used to pay plan costs (benefits - 93%, administration - 7%) • Under the pre-tax arrangement, the member does not pay the $480 as tax, it goes as whole dollars to pay Extended Heath costs

  4. Voluntary Associations • Presently Five Voluntary Associations • Park West, Interlake, Rolling River, Pine Creek, Whiteshell • Voluntary Plans cease to exist as at Sept 2013 • Enrollment period for voluntaries • Only for members not presently enrolled • Members with spousal employer administered plans or NIHB can waive coverage • Members who wish to remain as non-participants will be able to waive coverage by declaring that status and they will be grandfathered and remain as such • Note, if the member fails to send in the enrolment forms, then they will be deducted premiums at family status and have no coverage

  5. Compulsory Plan Advantages • Increased pharmaceutical coverage, from $1200 per person per year to one’s pharmacare threshold: • At $75,000 adjusted family income - $4627.50 • At $50,000 adjusted family income - $2540.00 • 5% premium reduction • Existing voluntary – (s) $54,45 (f) $108.90 • Compulsory - (s) $51.70 (f) $103.40 • Note – in pre-tax dollars, premium cost to member drops to approx. 60% of above

  6. Compulsory Associations • No change to coverage or premiums until, at the earliest, Sept 2014 • Renewal date will change to September so first fiscal year will be a 20 month year • All premiums go to pre-tax • Single $51.70 • Family $103.40 • Note in pre-tax dollars, premium cost to member drops to approx. 60% of above

  7. Retirees • Retirees will see no change to the Plan and premiums will not see the pre-tax advantage as there is no employer

  8. Collective Agreements • Existing Collateral and Auxiliary for the Dental Plan will incorporate and reflect the Extended Health Plan • The net grids will reflect both Dental and Extended Health where the Plans exist - singles and couples (dental) will receive the adjustment • The Auxiliary will reflect the gross salaries paid to opt outs under both Plans • Future negotiations will start for the gross grid (Auxiliary) • Future salary settlements will result in equivalent changes to premiums – accounts for medical inflation • Within the life of a Collective Agreement, a new net grid and an LOU, reflecting revised premiums will be produced and executed in May of each year

  9. Fiduciary Responsibility • Transfers to Trust • Four voting trustees from each parent body and one voting non-teacher • Trustee responsibilities are to the Plans - given the financials they must see to the continuance of and/or changes to the Plan • Has worked for over 40 years in Life Insurance and 30 years in Dental Plan • Since 2009, three changes to the Trusts – one to Dental and two to Life – all were incorporated

  10. Surpluses/Deficits • Presently, under Dental, when Associations experience surpluses, the Association is given options to increase coverage or decrease premiums - deficits work in reverse • Under the Extended Health Plan, as it is a Provincial Plan, the Trust will deal with surpluses/deficits after input from the trustees • Extended Health premium adjustments and/or coverage changes will continue on a provincial basis

  11. Pension Effect Illustration of Net Value – MSBA/MTS Dental (Family) After 30 years (Actuarial present value today for a person age 25) * When participating in the plan the $,1000 annual dental premium is deducted from the base earnings. Disability contributions and benefits and other benefits related to base earnings have been excluded from the analysis.

  12. Impact on Pensions

  13. Non-teachers • Due to diverse salaries and frequency of part-time employment, the non-teaching groups will be offered four levels of coverage. The group can decide to go any one of the four. The option with the most coverage will also be the most expensive one, and that will be the current teacher plan. • If payroll departments can facilitate the pre-tax system, the group can obtain it.

  14. Questions Glen Anderson 204 831 3052 866 494 5747 ext 279 ganderson@mbteach.org

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