At the May meeting of the State Teachers Retirement Board, the board approved a number of STRS Ohio Health Care Program changes that will take effect in the 2015 plan year. During the April 2014 board meeting, staff proposed health care program changes for plan years 2015 and 2016. The approved changes for 2015 follow the health care strategic framework adopted by the board in 2011 and are designed to improve the board’s ability to sustain the health care program by focusing on:
•Reducing non-Medicare program costs;
•Staying below the Affordable Care Act’s excise tax threshold in 2018;
•Guiding enrollees to lower cost plans, in-network providers and cost-effective services; and
•Offering subsidies only to members enrolled in an STRS Ohio health care plan.
The only actions taken on proposed changes for the 2016 plan year were related to the Medicare Part B reimbursement and to the dental and vision programs. Those actions are included along with the approved 2015 changes outlined below. The board is planning to take action on other proposed changes for the 2016 plan year at its June meeting. STRS Ohio’s upcoming newsletters in July and October will detail the 2015 and 2016 plan changes.
STRS Ohio Health Care Program Changes Approved for 2015
Reducing the subsidy multiplier by 0.1% to 2.2% per year of service — This is a continuation of the phased-in reduction that the board began in 2012. A retiree with 30 or more years of service will receive a subsidy in 2015 of 66% of the total cost of the plan. The 2014 subsidy for a retiree with 30 or more years of service is 69%.
Medical Mutual Plus and Basic Plan changes
Include two in-network primary care visits at $20 each in the Basic Plan.
Increase deductible and coinsurance out-of-pocket limits as follows:
In-network coverage changes include: reducing deductible to $300 from $500; reducing primary care physician office visit copay to $15 from $20; increasing specialist physician office visit copay to $25 from $20.
Out-of-network coverage changes include: increasing out-of-pocket limit to $2,000 from $1,500; increasing specialist physician office visit copay to $50 from $40; and increasing coinsurance percentage to 6% from 4%.
Express Scripts Plan changes
Increase the covered brand-name deductible to $200 from $150.
Implement a specialty drug tier with a 10% coinsurance up to $500 maximum per fill limit.
Increase the maximum annual expense per enrollee to $4,700 from $4,550 to match the expected 2015 Medicare Part D maximum out-of-pocket limit.
Other proposed changes include:
Continue the Health Care Assistance Program at $0 premium with the following program changes: increase the emergency room copayment to $150 from $50 and increase the covered brand-name drug copayment to $20 from $15 at retail and to $40 from $30 for home delivery.
Discontinue health care premium subsidies and Medicare Part B partial premium reimbursements for individuals who become beneficiaries and survivors on or after Jan. 1, 2015.
Continue Medicare Part B premium reimbursement at 2014 levels for plan years 2015 and 2016.
Limit Medicare Part B premium reimbursement to benefit recipients enrolled in an STRS Ohio medical plan.
Continue the current Delta Dental and Vision Service Plan programs for the next two-year period 2015–2016.
Apply the same 2.2% subsidy multiplier used for the Aetna and Medical Mutual plans to the regional plans based solely upon the costs of the regional plans, not to exceed the base plan subsidy.
Board Approves New Funding Policy
The Retirement Board approved a Funding Policy during its May 2014 meeting, following several months of study and discussion. The board first discussed establishing a funding policy with its actuarial consultant in October 2013. The purpose of a funding policy is to reflect the funding philosophy of the board and to help ensure the funding of future benefit payments for members and benefit recipients of STRS Ohio.
The newly adopted Funding Policy extracts some portions of the board’s Member Benefits Policy and replaces the Actuarial Condition Policy. The Funding Policy states in part,
“The funding philosophy and objectives shall establish the framework and specific objectives to monitor the Retirement System’s funding status and by preserving the financial improvements realized by the passage of pension reform legislation in 2012 — Sub. S.B. 342 of the 129th General Assembly.”
Board policies are available on STRS Ohio’s website.
Board Authorizes Staff to Pursue Change in Statute to Extend Survivor Benefits to Qualified children Until Age 22
When active members or disability benefit recipients die, their family members may be eligible for monthly survivor benefits. The Retirement Board approved a staff proposal to seek a change in statute to extend survivor benefits to qualified children to age 22 with no requirement for school enrollment. Under current law, survivor benefits are paid to qualified children up to age 18, and then up to age 22 if the child is enrolled in school on at least a two-thirds-of-full-time basis.
Changing the statute would recognize that children have more options for obtaining education and training than in the past. With each new education program, it becomes more difficult to determine if the child is completing a program on at least a two-thirds-of-full-time basis. The spirit of the law is to financially support children post-high school through studies and/or training to help them establish careers. A change in statue would also allow surviving families to have a reliable, predictable stream of income. Staff is working with a member of the Ohio House of Representatives to potentially add this provision to proposed legislation. It is not known when this legislation will be introduced.
The Retirement Board approved 70 active members and 66 inactive members for service retirement benefits.
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