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Retirement Board Meeting. May 11, 2011 Retiree Benefits Briefing & Overview Presented by the Peralta District Benefits Office. Agenda. Current Post Employment Benefits for Peralta Retirees -”What do our retirees get”? Medical Insurance Reimbursement of Medicare Premiums Life Insurance
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Retirement Board Meeting May 11, 2011 Retiree Benefits Briefing & Overview Presented by the Peralta District Benefits Office
Agenda • Current Post Employment Benefits for Peralta Retirees-”What do our retirees get”? • Medical Insurance • Reimbursement of Medicare Premiums • Life Insurance • Review of our population • Review of census • Participation distribution • Medicare Coordination & Outreach efforts • Federal Subsidy Programs • Medicare D- Medicare Drug Reimbursement Program of 2005 • ERRP- Early Retiree Reinsurance Program (2010) Two handouts: Annual Open Enrollment Announcement Sept 2010 Medicare Reimbursement Form
Current Other Post Employment Benefits(OPEB) • Medical ($147m = Actuarial Accrued Liability for current retirees only, per most recent study performed by Bartels & Associates) • Refer to the “Peralta Benefits – Everyone” ed. Sept 2010, pages 19-21: • Pre 2004, benefits continue for the lifetime of the retiree • Post 2004, benefits continue to age 65 • Payment arrangements for surviving spouses • We do not pay for surviving spouses of retirees • We bill Kaiser survivors through Benefits Dynamics • CoreSource bills survivors directly • We do not pay for dental insurance unless the retiree and/or dependent is enrolled in the Kaiser Senior Advantage Plan • We pro-actively cull records through an interactive data base • Reimbursement of Medicare Premiums ($1m) • We reimburse retirees based on premiums they pay and as calculated by the Center for Medicare and Medicaid Services (CMS) • Reimbursements are income sensitive; not the same for everyone • Life Insurance • Continues to age 66 • Runs about $2000/month; $24k/year
Medicare Census, Costs & Savings From Bartels • E6 From Coresource • Special Note: • 343 on CoreSource; 72 not coordinated with Medicare; We saved $1.8m in this fiscal year to • Medicare coordination • 247 on Kaiser; 49 not coordinated with Medicare; they cost us an additional $300,000 in higher annual • premium costs • About 20% of our retirees may not be coordinating with Medicare-see how much we save when they do!
1991 1991 - 1994
1991 - 2004 “Those retirees who are eligible for Medicare Part A coverage at age 65 shall apply for such coverage so long as there is no additional cost to the retiree… Retirees eligible for Medicare B are not required to enroll in that program so long as it requires payment.” 2004 – present Faculty members hired before July 1, 2004, 3.c “ When such employees reach the age of Medicare eligibility (currently age 65) they shall enroll in Medicare Parts A and B, provided the District pays 100% of the current and future costs of Medicare premiums. The District shall pay or reimburse the retiree for the current and future costs of the Medicare premiums. Summary of transition
Outreach efforts • Annual meetings/luncheon with Kaiser and Medicare representatives to deliver on-site enrollment • Telephone banks • Personal mailings • Options to control costs • Discontinue Kaiser Traditional Plan for Medicare-eligibles, only offer them Kaiser Senior Advantage…(or Kaiser Out of Area plan or CoreSource) • Send letter to inform all retirees of District commitment to provide lifetime benefits under the current plans available to them
Medicare Drug Subsidy Program • What is the subsidy • We receive a subsidy for those retirees over 65 and on our self-funded rx plan currently with Caremark. • We receive a discounted premium for those retirees on our Kaiser senior advantage plan. • How much have we received?
Early Retiree Reinsurance Program • The Early Retiree Affordable Care Act provides • $5 billion in financial assistance to employers, unions and state and local governments to • help group plans maintain coverage • for early retirees age 55 and older • who are not yet eligible for Medicare • Peralta’s applications were approved in Fall 2010 (Separate applications were required for CoreSource and Kaiser) • Must maintain a wellness campaign for our early retirees as a condition of participating in the program • Showed them the 2010 wellness calendar • Vendor websites • Benefits fair activities • We will design a more comprehensive approach in the fall • Subsidy monies due Peralta are pending- • If useage patterns continue, we project about $400k/year in subsidy • However, once the pool of $5b is gone, it is gone • We are competing with private entities and other municipalities