Following a review that took place during its April meeting, the State Teachers Retirement Board approved the following changes to the STRS Ohio Health Care Program for 2016:
Prescription Drug Program -- Adopt a methodology of setting the self-insured prescription program annual deductible to 63% of standard Medicare Part D deductible limit rounded down to the nearest $25 increment. Using this methodology, the 2016 Express Scripts deductible will increase to $225 from $200.
Regional Plans -- Change the national base plan for non-Medicare regional plans to the Medical Mutual Basic Plan.
STRS Ohio staff will present 2016 premiums for board approval in June.
Last year, the Retirement Board approved a number of changes to the health care program for 2016. The changes approved last year included:
Premium subsidy and reimbursement
Reduce the subsidy multiplier by 0.1% to 2.1% per year of service. This completes the phased-in reduction the board began in 2012. A retiree with 30 or more years of service will receive a subsidy in 2016 of 63% of the total cost of the plan.
Continue the Medicare Part B premium reimbursement at 2015 levels for eligible benefit recipients enrolled in an STRS Ohio health plan.
Aetna Medicare Plan
Reduce the in-network deductible to $150 from $300.
Out-of-network coverage changes include: increasing out-of-pocket limit to $2,500 from $2,000; increasing specialist physician office visit copayments to $55 from $50; increasing coinsurance percentage to 8% from 6%; and increasing skilled nursing/home health care coinsurance to 8% from 2%.
Discontinue the Plus Plan and transition those enrollees to the Basic Plan.
Increase the Basic Plan deductible and coinsurance out-of-pocket limits to:
Increase the maximum annual expense per enrollee to $4,850 from $4,700.
STRS Ohio’s newsletters in July and October will detail the 2016 plan changes.
Funding Policy Discussion Continues
In May 2014, the Retirement Board approved changes to Board Policies regarding funding. Since that time, the board, STRS Ohio staff and the board’s actuarial consultant, Segal Consulting, have discussed ways to improve the board’s funding policy. That discussion continued at the May board meeting, as STRS Ohio staff discussed various metrics that could be used to provide input about the current status of the plan, as well as the expected future status of the plan. Proposed metrics to assess the plan status included:
•Funded ratio -- the ratio of plan assets compared to the plan’s accrued liabilities;
•Funding period -- the amount of time the fund projects it will need to reach 100% funded status;
•Plan status forecast -- the probability of significant deterioration of plan funding in the 10 years after the measurement date; and
•Economic considerations -- putting recent realized investment returns in context of long-term expected returns.
The board is expected to continue its discussion in the months ahead, evaluating under what conditions it might consider potential changes to plan design. These studies and discussions are a responsible part of the board’s fiduciary duties to help ensure a financially strong STRS Ohio.
The Retirement Board approved 132 active members and 94 inactive members for service retirement benefits.
Sheppard to Represent the State Superintendent of Public Instruction; Rafeld Recognized for Board Service
In April, State Superintendent of Public Instruction Richard A. Ross appointed his new Chief of Staff Jimmy Sheppard as his representative on the State Teachers Retirement Board. Sheppard formerly served as assistant policy director for education for Ohio Gov. John Kasich. Sheppard replaces Jason Rafeld on the board. The board recognized Rafeld for serving the public educators of Ohio with integrity during his time on the board.
Other STRS Ohio News
STRS Ohio Earns GFOA Certificate of Achievement for its Comprehensive Annual Financial Report
In April, STRS Ohio learned that its Comprehensive Annual Financial Report for fiscal year 2014 qualified for the Government Finance Officers Association’s (GFOA) Certificate of Achievement for Excellence in Financial Reporting. The retirement system has received the GFOA certificate each year since 1990. STRS Ohio consolidates financial, investment, actuarial and statistical information into one publication that meets the standards established by the GFOA to receive this recognition.