Retiree Health Care

1. Retiree Health Care April 24, 2013

2. Learning Objectives • OPERS History and Funding Challenges • 2013 Coverage Overview • Manage Your Health Care • Health Care Changes 2014 • Resources This presentation reflects current information. There is no promise, guarantee, contract or vested right to access to health care coverage or a premium allowance. The Board has the discretion to review, rescind, modify or change the health care plan at any time. OPERS is implementing Sub S.B. 343 within a reasonable time frame. 2

3. Learning Objectives • OPERS History and Funding Challenges • 2013 Coverage Overview • Manage Your Health Care • Health Care Changes 2014 • Resources 3

4. Historical Change Increased Life Expectancies • Men and women are living approximately 10 years longer today compared to statistics from the 1950’s Growth in Retirees • 1967 – OPERS had almost 31,500 retirees • 2011 – OPERS had over 184,900 retirees • 2058 – Projections indicate we will have over 370,000 Return on Investments • 1990 – 2012 – Unprecedented increases in health care costs • 2008 – Economic downturn 4

5. The Impact on Funding $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $4,329,981,866 Billions $1,573,388,206 1965 1970 1975 1980 1985 1990 1995 2000 2005 2011

6. An Illustration of Funding Member Contributions Employer Contributions Investment Income Investment Income 30 year funding Health Care Fund Pension Fund Pension Benefit Payments Health Care Coverage Payments

7. Learning Objectives • OPERS History and Funding Challenges • 2013 Coverage Overview • Manage Your Health Care • Health Care Changes 2014 • Resources 7

8. Eligible Dependents • Legal Spouse - Full premium cost for spouse under age 55 • Children - Biological or legally adopted - Under age 26 • Grandchildren - Only if legally adopted or with court order pursuant to the Ohio Revised Code 8

9. 2013 Medical Mutual Plan FeaturesNon-Medicare Medical • Increase in deductible and out-of-pocket maximums • Lower primary care and specialist office visit copays for common chronic conditions: 1.) Diabetes, 2.) Depression, 3.) High Cholesterol, 4.) Congestive Heart Failure (CHF), 5.) High Blood Pressure, 6.) Chronic Obstructive Pulmonary Disease (COPD), 7.) Coronary Artery Disease (CAD), 8.) Asthma • Lower office visit copay for using Patient-Centered Medical Homes (PCMH)…. 9

10. What is a Patient-Centered Medical Home? • A team of professionals working together providing comprehensive and coordinated care - The patient and family are at the center of the care team - Coordinates all of your needs • Wellness and prevention, chronic care and end of life concerns • Across care settings and providers • Provides improved access to care – same day appointments when necessary, e-mail access • Ensures you understand your treatment options and receive follow-up care • Recognized by the National Committee for Quality Assurance (NCQA) 10

11. Prescriptions • Cost varies based on the following factors: -Generic -Formulary (go to www.opers.org for list) -Non-Formulary -Annual deductible for brand name medications -Retail 30 day supply -Mail 90 day supply • At Medicare eligibility, you will transition to Medicare Part D (PDP) managed by Express Scripts 11

12. 2013 Kaiser Permanente Plan OPERS offers Kaiser Permanente HMO in 2013 to retirees in certain Ohio counties Kaiser Permanente Plans • Non-Medicare Plan • Premiums remained the same • Medicare Plus Plan • No-cost gym membership through Silver Sneakers • Premiums decreased

13. Medicare • Happy Birthday – 65 years old (100 days prior) • Contact Social Security to enroll • Medicare Part A – Hospitalization • Enrollment, apply if: • You qualify with a $0 premium • You have 40 Social Security credits • Or, you qualify through your spouse • Medicare Part B – Medical • Premium cost determined annually by Social Security • Medicare B Reimbursement will be phased out by 2017

14. 2013 Medicare Plan Features Medical: • Humana Medicare Advantage Plan • No increase to deductible or out-of-pocket

15. Optional Coverage MetLife Dental and Aetna Vision • High Option • Low Option • Enroll/change options during Open Enrollment or qualifying event

16. Learning Objectives • OPERS History and Funding Challenges • 2013 Coverage Overview • Manage Your Health Care • Health Care Changes 2014 • Resources 16

17. Wellness Programs & RMA Administered by Medical Mutual & Humana • Simply complete two of the following: • Health Care Assessment • Humana, Medical Mutual websites • Annual Physical Exam • Lifestyle Coaching Program (smoking, weight , stress or nutrition) • Disease Management Program (chronic conditions) Administered by Aetna • Earn up to $100 in a rolling 12 month period • Example: April 1st to March 31st • Funds carry over to next year

18. How to Use Your RMA • DOWNLOAD & PRINT a claim for at www.aetna.com/fsaorwww.opers.org • COMPLETE the claim for and gather the documentation and receipts listed on the form. • MAIL OR FAX the completed RMA claim form and documents to Aetna • RECEIVE FUNDS as reimbursement for qualifying claims (by check or direct deposit)

19. Changing AllocationsThe Effect of Employer Contributions • In order to stay within the statutory 30 year funding requirement, more of the employer contributions were shifted away from the health care fund to the pension fund. • As a result of this shift, the health care solvency period decreased.

20. New Health Care Plan • Expect significant changes to the health care program • Our current health care program requires a 7.0% employer contribution which is not sustainable given our challenges • Our goal is to allocate 4% of the employer contribution to fund health care and extend coverage for career members

21. New Health Care Plan:Begins January 1, 2014 Delayed Enrollment • Allowance will be determined by years of service at retirement and age at enrollment Elected Withdrawal • Retiree cannot re-enroll in the OPERS plan once they have elected to withdraw Increased Cost • More out-of-pocket costs for premiums and covered services • Reduce and eliminate Medicare Part B Reimbursement

22. Health Care Allowance • For 2014 & 2015, allowance percentages will NOT change • Current and future retirees will transition to a restructured allowance table beginning in 2016 • Three year transition • Final allowances will range from 51–90% • Retirees at or above a 75% allowance will not receive less than 75% • Allowance will be based on years of service and age upon enrollment in the OPERS health car plan

23. Spousal Allowance & Access • Non-Medicare Spouses, Medicare Spouses and Surviving Spouses (current and future retirees) 2014 – Allowance unchanged 2015 – Allowance unchanged 2016 – Allowance reduced to 67% of 2015 level 2017 – Allowance reduced to 33% of 2016 level 2018 – No allowance, access only 2019 – No allowance, access only 2020 – Subject to review

24. Dependent Children Allowance & Access • For retirees with 20 or more years of qualified service, children will continue to receive an allowance equal to current percentages through 2015, regardless of the recipient’s retirement date • The transition will allow for a one-third reduction of the current allowance each year until it reaches 50% of the retiree’s allowance by 2018 • For retirees with less than 20 years of qualified service, child’s allowance will be $0 in 2018 • Access to coverage only will continue to 2018 & 2019

25. Disability Recipients Access • Recipients that convert to regular retirement after 1/1/2015, must have 20 years of qualified service for health care access

26. OPERS Medicare Connector • Medicare Part A and Part B are required • Medicare will be primary insurance • Provides more choices through the individual market to supplement your Medicare with greater affordability • Choose a plan that best suits your medical and financial needs OPERS sponsored plans will no longer be available for retirees with Medicare Part A and Part B