Retired Teachers Health Benefit Program Order 2007-12: Ordered - - PowerPoint PPT Presentation
Retired Teachers Health Benefit Program Order 2007-12: Ordered that, in accordance with the procedures set forth in MGL Ch. 32b s. 11e , The City of Gloucester shall terminate participation in the State Contributory Group Insurance plan for
Order 2007-12: Ordered that, in accordance with the procedures set forth in MGL Ch. 32b s. 11e, The City of Gloucester shall terminate participation in the State Contributory Group Insurance plan for retirees currently covered under this program and incorporate said retirees and future retirees into the City of Gloucester health insurance program under the provisions governing municipal retiree and surviving spouse benefits.
PART I. ADMINISTRATION OF THE GOVERNMENT TITLE IV. CIVIL SERVICE, RETIREMENTS AND PENSIONS CHAPTER 32B. CONTRIBUTORY GROUP GENERAL OR BLANKET INSURANCE FOR PERSONS IN THE SERVICE OF COUNTIES, CITIES, TOWNS AND DISTRICTS, AND THEIR DEPENDENTS Chapter 32B: Section 11E. Life and health insurance for retired teachers; appropriation of funds authorized; acceptance of section by political subdivisions Section 11E. Upon acceptance of this section as hereinafter provided, any political subdivision, subject to the provisions of section twelve of chapter thirty-two A, shall appropriate funds or apply therefor for the payment of certain costs for group life and health insurance coverages for teachers retired from the service of the political subdivision, and for health insurance coverages for their surviving spouses and dependents provided such teachers receive a pension or annuity allowance from the teachers’ retirement system, and for the payment of premiums, subsidiary or additional rates and administrative expenses required to be paid by paragraph (d) of section twelve of chapter thirty-two A. This section shall take effect in a county, except Worcester county, city, town or district upon its acceptance in the following manner:—in a county, except Worcester county, by vote of the county commissioners; in a city having a Plan D or Plan E charter by majority vote
voters of the district at a district meeting; in a regional school district by vote of the regional district school committee; and in a town either by vote of the board of selectmen or by a majority of affirmative votes cast in answer to the following question which shall be printed upon the official ballot to be used at an election in said town:—“Shall the town authorize all teachers insured for group life and health insurance, and their dependents, upon receiving a pension or annuity allowance from the teachers’ retirement system, to have such insurance transferred to the state for convenience of premium withholdings, with the town making payment of fifty per cent of the premium, a portion of the administrative expense and the payment of a subsidiary or additional rate to be paid by the town?” A political subdivision that has accepted this section and whose application has been approved by the commission as provided in section thirteen of chapter thirty-two A may thereafter terminate its acceptance of this section. Any political subdivision, before voting to terminate its acceptance of this section, shall notify the commission of its intent to submit such termination to a vote, and shall provide for a public hearing for the purpose of informing affected retired teachers and the public. All such affected retired teachers shall be notified at least thirty days prior to such public hearing. After such public hearing, a vote shall be taken of affected retired teachers in attendance. A simple majority shall determine the will of such majority. Such termination shall take effect by a vote obtained in the same manner as that required for an acceptance of this section except as heretofore mentioned. Such political subdivision shall thereafter furnish notice of termination to the commission.
relative to teacher’s retirement and health insurance participation in GIC (Group Insurance Commission). Initially retirees paid 50% of the premium costs with the balance paid by the City via Cherry Sheet assessments. Since then, the premium split for participating municipalities and districts has increased to 90% with the retiree/surviving spouse paying 10%. There is no municipal input on the increases of premiums, or the plan benefits offered by the GIC.
contribution from the City. Surviving spouses share the cost 50/50.
Retired Municipal Teachers’ Program (RMT). In recent years Lynnfield, Franklin, Berlin- Boylston and Berkshire Regional School District have all elected to terminate participation in the program.
MGL 32b sec. 11e.
savings for FY07 would have been more than $600,000
savings for FY08 will be approximately $455,784
beneficiaries participating in the plan. The numbers rise and fall as participation changes.
City of Gloucester Group Insurance Payments
Comm Indemnity OME Health = Medex Potential Plan Family/ GIC Cost GIC Annual COG COG Annual Annual GIC COG Desig. Individual Enrollees to City Cost CostTo City Plan Cost tot. Savings Payment Payment Difference RMS Individual 15 $339.28 $61,070.40 $179.20 $32,256.00 $28,814.40 $52.76 $179.20 $126.44 RMT Individual 149 $339.28 $606,632.64 $268.80 $480,614.40 $126,018.24 $52.76 $89.60 $36.84 Comm Indemnity Health = Blue Choice Potential Plan Family/ GIC Cost GIC Annual COG COG Annual Annual GIC COG Desig. Individual Enrollees to City Cost Plan Cost Plan Cost Savings Payment Payment Difference RMS Individual 3 $634.63 $22,846.68 $227.32 $8,183.52 $14,663.16 $111.20 $227.32 $116.12 RMT Individual 58 $634.63 $441,702.48 $340.97 $237,315.12 $204,387.36 $111.20 $113.66 $2.46 Family 29 $1,525.33 $530,814.84 $905.42 $315,086.16 $215,728.68 $269.38 $301.81 $32.43 Comm Indemnity Health = Blue Care Elect RMT Individual 7 $634.63 $53,308.92 $393.89 $33,086.76 $20,222.16 $111.20 $131.30 $20.10 Family 2 $1,525.33 $36,607.92 $987.39 $23,697.36 $12,910.56 $269.38 $329.13 $59.75 Tufts Secure Medicare Preferred = Medex Potential Plan Family/ GIC Cost GIC Annual COG COG Annual Annual GIC COG Desig. Individual Enrollees to City Cost Plan Cost Plan Cost Savings Payment Payment Difference RMT Individual T 7 $133.97 $11,253.48 $268.80 $22,579.20
$14.89 $89.60 $74.71 Totals 270 $1,764,237.36 $1,152,818.52 $611,418.84 Cost to retirees
Scenario 1 - Straight transfer to COG - same premium splits as current retirees. Total Savings $455,784 City of Gloucester Group Insurance Payments Proj 7% Medex Proj 18.2% Blue Choice Comm Indemnity OME Health = Medex FY08 GIC Total FY08 GIC FY08 GIC Total Prem. FY08 COG FY08 COG Total Prem.FY08 COG Annual FY08 GIC TO COG Plan Family/ MONTHLY Employ Contrib. GIC Prem.FY08 COG COSTCOG Retiree pays COG Prem. Cost Premium Increase Desig. Individual Enrollees CITY COST RMS Individual 15 $54,626.40 $303.48 $46.48 $349.96 $191.75 $191.75 $383.50 $34,515.00 $145.27 RMT Individual 149 $542,622.24 $303.48 $46.48 $349.96 $287.62 $95.87 $383.49 $514,264.56 $49.39 $548,779.56 Comm Indemnity Health = Blue Choice Plan Family/ Desig. Individual Enrollees RMS Individual 3 $24,180.12 $671.67 $118.52 $790.19 $268.69 $268.69 $537.38 $9,672.84 $150.17 RMT Individual 58 $467,482.32 $671.67 $118.52 $790.19 $403.03 $134.34 $537.37 $280,508.88 $15.82 Family 29 $561,755.52 $1,614.24 $287.15 $1,901.39 $1,070.20 $356.73 $1,426.93 $372,429.60 $69.58 $662,611.32 Comm Indemnity Health = Blue Care Elect RMT Individual 7 $56,420.28 $671.67 $118.52 $790.19 $465.58 $155.19 $620.77 $39,108.72 $36.67 Family 2 $38,741.76 $1,614.24 $287.15 $1,901.39 $1,167.09 $389.03 $1,556.12 $28,010.16 $101.88 $67,118.88 Tufts Secure Medicare Preferred = Medex Plan Family/ Desig. Individual Enrollees RMT Individual 7 $12,625.20 $150.30 $16.70 $167.00 $287.62 $95.87 $383.49 $24,160.08 $79.17 Totals 270 $1,758,453.84 Total GIC cost to city $1,302,669.84 Total COG Cost
Net Savings to Gloucester
Plan Individual Family Surviving Spouse
mo yr mo yr mo yr Commonwealth Indemnity OME Health $46.48 $557.76 $46.48 $557.76 $303.48 $3,641.76 $303.48 $3,641.76 Commonwealth Indemnity Health $118.52 $1,422.24 $287.15 $3,445.8 $118.52 $1422.24 $671.67 $8,060.04 $1,614.24 $19,370.88 $671.67 $8,060.04 Tufts Secure Medicare Preferred $16.70 $200.40 $16.70 $200.40 $150.30 $1,803.60 $150.30 $1,803.60 Blue Cross/Blue Shield (City of Gloucester) $134.34 $1,612.08 $356.73 $4,280.76 $268.69 $3,224.28 $403.03 $4,836.36 $1,070.20 $12,842.40 $268.69 $3,224.28 Medex (City of Gloucester) $95.87 $1,150.44 $191.75 $2,301 $287.62 $3,451.44 $191.75 $2,301 Blue Care Elect (City of Gloucester) $155.19 $1,862.28 $389.03 $4,668.36 $465.58 $5,586.96 $1,167.09 $14,005.08
Top rate is the retiree contribution/Bottom figure is City of Gloucester contribution.
Plan Comparison - Non Medicare Retirees 2008 Rates
COVERAGE CITY OF GLOUCESTER BLUE CHOICE COMMONWEALTH INDEMNITY PLAN BASIC Monthly Cost to City of Gloucester Ind $403.03, Fam $1070.20; Surviving Spouse Ind $268.69, Fam $713.47 RMT Individual $671.67, Family $1614.24 Monthly Cost to Retirees Ind $134.34, Fam $356.73; Surviving Spouse Ind $268.69, Fam $713.47 Individual $118.52, Family $287.15 Plan Outline Need Primary Care
services provided at 20% co-pay after $250 deductible (Ind) or $500 (Fam). No balance billing when seen by BC/BS affiliated doctor. Plan is good anywhere in US or out of country. No balance billing for MA
services such as lab and durable medical equip, you can use any provider but higher benefit paid for use
provider. Hospital Care No Charge $150 Per Quarter Emergency Room $50 Waived if Admitted $50 Waived if Admitted Office Visits $10 per visit $10 per visit Outpatient Surgery No Charge $75 Deductible Prescription Retail 30 day Supply $10 Generic, $20 Preferred, $35 Non-Preferred $7 Generic, $20 Preferred, $40 Non-Preferred Prescription Mail-in 90 Day Supply $10 Generic, $20 Preferred, $35 Non-Preferred $14 Generic, $40 Preferred, $90 Non-Preferred. Hearing Aides No Coverage First $500 covered, 80% for next $1,500 per 2 yr period Durable Medical Equipment Up to $1,500 per year 80% or 100% with authorization for anyting
Home Health Care No Charge 80% or100% of allowed changes after $75 deductible. Skilled Nursing Facility No charge up to 100 days 80% for 45 days Rehabilitation Hospital No Charge up to 60 days Full coverage of allowed charges after $150 quarterly deductible Chiropractor $10 per Visit up to 12 Visits per year 80% or 100% up to 20 visits
PLAN COMPARISON - MEDICARE RETIREES 2008 Rates
COVERED SERVICES CITY OF GLOUCESTER MEDEX PLAN COMMONWEALTH INDEMNITY PLAN Monthly Cost to City of Gloucester $287.62 Retiree, $191.75 Surviving Spouse $303.48 RMS & RMT Monthly Cost to Retiree $95.87 Retiree, $191.75 Surviving Spouse $46.48 RMS & RMT Hospital Care No Charge $50 per quarter deductible Emergency Room No Charge $25 waived if admitted Preventive Care Exams per Approved Schedule $5 per visit Physician Office Visits No Charge $35 deductible per calendar year Outpatient Surgery No Charge $75 deductible Prescription Retail 30 Day Supply $50 calendar year deductible, then generic free, 20% co-pay for brand name $7 generic, $20 preferred, $40 non-preferred Prescription Mail-In 90 Day Supply $2 generic, $10 brand name $14 generic, $40 preferred, $90 non-preferred Hearing Aides No Coverage First $500 covered, 80% for next $1,500 per 2 year period Hospice Care No Charge $35 per year deductible Durable Medical Equipment No Charge 80% or 100% with authorization for anything
Chiropractor Full coverage if Medicare approved, 20% of services not covered by Medicare. 80% or 100% up to 20 visits Skilled Nursing Facility Full coverage days 1-100 with Medicare; $16 per day for days 101-354 Full coverage days 21-100. 80% after day 100 up to $10,000 Rehab Hospital Full coverage days 1-100 with Medicare; $16 per day for days 101 - 354 Full coverage of allowed charges after $50 quarterly deductible Home Health Care No Charge Full coverage of allowed charges after $35 deductible
Plan Comparison - Out of State Retirees 2008 Rates
COVERAGE CITY OF GLOUCESTER BLUE CARE ELECT COMMONWEALTH INDEMNITY PLAN BASIC Monthly Cost to City of Gloucester Individual $465.58, Family $1167.09 RMT Individual $671.67, Family $1614.24 Monthly Cost to Retirees Individual $155.19, Family $389.03 Individual $118.52, Family $287.15 Plan Outline You receive max benefits when you choose a BC/BS doctor, but can treat with any physician at out of network rate (20% co-pay). Out of network deductible $250 per member or $500
anywhere in the US. No balance billing when seen by BC/BS affiliated doctor. Plan is good anywhere in the US or out of the
for MA providers. For certain services such as lab and durable medical equipment, you can use any provider but higher benefit paid for use of plan's preferred provider. Hospital Care No Charge $150 Per Quarter Emergency Room $50 Waived if Admitted $50 Waived if Admitted Office Visits $15 per visit $10 per visit Outpatient Surgery No Charge $75 Deductible Prescription Retail 30 day Supply $10 Generic, $20 Preferred, $35 Non-Preferred $7 Generic, $20 Preferred, $40 Non-Preferred Prescription Mail-in 90 Day Supply $10 Generic, $20 Preferred, $35 Non-Preferred $14 Generic, $40 Preferred, $90 Non-Preferred. Hearing Aides No Coverage First $500 covered, 80% for next $1,500 per 2 yr period Durable Medical Equipment Up to $1,500 per year 80% or 100% with authorization for anything
Home Health Care No Charge 80% or 100% of allowed charges after $75 deductible Skilled Nursing Facility No charge up to 100 days 80% for 45 days Rehabilitation Hospital No Charge up to 60 days Full coverage of allowed charges after $150 quarterly deductible Chiropractor $15 per Visit 80% or 100% up to 20 visits
What will the impact be on our risk pool with the inclusion of 270 retirees and spouses? Because the city is self-insured with its Medex plans, the potential changes to the risk pool would be concentrated among those participants converting to the non-Medicare eligible Blue Cross/ Blue Shield plan. Currently this includes 99 of the 270. The City’s insurance advisor is analyzing potential impacts to the rate structure.
If it becomes an option for the city to join the GIC for the entire municipal workforce and retirees, does it make sense to pull the retired teachers out only to jump back in a year or two from now should the legislature allow it?
separate from the general GIC plan. Should the city be allowed to join the GIC as a whole, the city would be able to set the rates splits for all participants when it enters the system.
What about this possibly being a net loss in a few years if our rates continue to rise faster than the state rates? Is there a measure by which we might predict a possible break-even scenario? While this is a possibility, based on historic average increases, it is unlikely that the City program premiums would outstrip the savings
based on historic averages, substantial savings will continue to be realized for the foreseeable future.
Projections based on historical averages from 2001-2008 City of Gloucester has had a historic increase in BCBS of 11.07% and Medex of 11.75% GIC has had a historic average increase of 8.168 including the two most recent years This projection is very basic, showing only what would happen with a continued historic average rise over the next 10 years. Actual results will vary. FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 GIC 8.168% 1,715,943 1,758,454 1,902,085 2,057,447 2,225,499 2,407,278 2,603,904 2,816,591 3,046,650 3,295,501 3,564,677 COG Blue 11.07% (56.02%) 591,547 729,730 810,511 900,235 999,891 1,110,579 1,233,520 1,370,070 1,521,737 1,690,193 1,877,298 COG Medex 11.75% (43.98%) 532,224 572,940 613,046 655,959 701,876 751,007 803,578 859,828 920,016 984,418 1,053,327 COG Total 1,123,771 1,302,670 1,423,557 1,556,194 1,701,767 1,861,586 2,037,098 2,229,899 2,441,753 2,674,611 2,930,625 COG-GIC
500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 GIC 8.168% COG Blue 11.07% (56.02%) COG Medex 11.75% (43.98%) COG Total
What about the surviving spouses who will see their premiums jump from 10% of the cost to 50% of the cost? Currently there are 18 of the 270 who are surviving spouses. They will see a significant increase in their premium share. By bringing these beneficiaries in at the same 75/25 split as other retirees we would substantially reduce their premium increase. This would
What about hearing aid coverage? One benefit that isn’t covered under the COG plan is hearing aids. At least one other community established a trust fund to offset this change in coverage for those currently receiving the benefit via the GIC plan and this would be a good and reasonable solution.
jobs and services. Projections for FY08 are approximately $455,000, with continued annual savings in a similar range.
the prospective loss of 29 teaching positions and closure of an elementary school; and the City facing a still undetermined deficit, Gloucester can no longer afford a two-tiered benefit system.
expensive than Gloucester’s Blue Cross/Blue Shield plans: $790 vs $537 for the individual plan and $1901 vs $1427 for the family plan.
an excellent health plan for its employees/retirees. Retired teachers would be receiving the same benefits afforded all other municipal retirees and current employees.
prior to retirement. While there will be increases in premiums, many of these increases may be offset by less expensive benefit costs such as prescription drugs and lower or eliminated deductibles.
included a premium split of 50/50.
has shifted to 90/10 without the ability of the City to participate in the changes or influence the decisions on which plans are offered.
administrators and school nurses are eligible for participation in the RMT/GIC program at the 90/10 ratio.
school employees, are covered under the City of Gloucester plan at 75/25 with surviving spouse coverage at 50/50.
Gloucester is eligible to join the GIC in its entirety, and it makes financial sense to do so, all employees and retirees would enter the program
premium splits.
While it is the decision of the Council as to whether to withdraw participation in the GIC system, the method and terms of integration are an Administrative
transition can be effected and are offered for suggestion and discussion.
Scenario 1 - Straight transfer to COG - same premium splits as current retirees. Total Savings $455,784 City of Gloucester Group Insurance Payments Proj 7% Medex Proj 18.2% Blue Choice Comm Indemnity OME Health = Medex FY08 GIC Total FY08 GIC FY08 GIC Total Prem. FY08 COG FY08 COG Total Prem. FY08 COG Annual FY08GIC TO COG Plan Family/ MONTHLY Employ Contrib. GIC Prem.FY08 COG COST COG Employ Contr. COG Prem. Cost Increase Desig. Individual Enrollees CITY COST Retiree pays RMS Individual 15 $54,626.40 $303.48 $46.48 $349.96 $191.75 $191.75 $383.50 $34,515.00 $145.27 RMT Individual 149 $542,622.24 $303.48 $46.48 $349.96 $287.62 $95.87 $383.49 $514,264.56 $49.39 $548,779.56 Comm Indemnity Health = Blue Choice Plan Family/ Desig. Individual Enrollees RMS Individual 3 $24,180.12 $671.67 $118.52 $790.19 $268.69 $268.69 $537.38 $9,672.84 $150.17 RMT Individual 58 $467,482.32 $671.67 $118.52 $790.19 $403.03 $134.34 $537.37 $280,508.88 $15.82 Family 29 $561,755.52 $1,614.24 $287.15 $1,901.39 $1,070.20 $356.73 $1,426.93 $372,429.60 $69.58 $662,611.32 Comm Indemnity Health = Blue Care Elect RMT Individual 7 $56,420.28 $671.67 $118.52 $790.19 $465.58 $155.19 $620.77 $39,108.72 $36.67 Family 2 $38,741.76 $1,614.24 $287.15 $1,901.39 $1,167.09 $389.03 $1,556.12 $28,010.16 $101.88 $67,118.88 Tufts Secure Medicare Preferred = Medex Plan Family/ Desig. Individual Enrollees RMT Individual 7 $12,625.20 $150.30 $16.70 $167.00 $287.62 $95.87 $383.49 $24,160.08 $79.17 Totals 270 $1,758,453.84 Total GIC cost to city $1,302,669.84 Total COG Cost
Scenario 2: Bring all surviving spouses into CoG at 75/25 split - Total Savings $433,691 City of Gloucester Group Insurance Payments Proj 7% Medex Proj 18.2% Blue Choice Comm Indemnity OME Health = Medex FY08 GIC 6.6% FY08 GIC FY08 GIC Total Prem. FY08 COG FY08 COG Total Prem. FY08 COG Annual FY08GIC TO COG Surviving Spouses Plan Family/ GIC 6.6% MONTHLY Employ Contrib. GIC Prem. FY08 COG COSTCOG Employ Contr. COG Prem. Cost Increase all at 75/25 Desig. Individual Enrollees CITY COST Retiree pays RMS Individual 15 $54,626.40 $303.48 $46.48 $349.96 $191.75 $191.75 $383.50 $34,515.00 $145.27 $51,771.60 RMT Individual 149 $542,622.24 $303.48 $46.48 $349.96 $287.62 $95.87 $383.49 $514,264.56 $49.39 $514,264.56 $548,779.56 Comm Indemnity Health = Blue Choice Plan Family/ Desig. Individual Enrollees RMS Individual 3 $24,180.12 $671.67 $118.52 $790.19 $268.69 $268.69 $537.38 $9,672.84 $150.17 $14,509.08 RMT Individual 58 $467,482.32 $671.67 $118.52 $790.19 $403.03 $134.34 $537.37 $280,508.88 $15.82 $280,508.88 Family 29 $561,755.52 $1,614.24 $287.15 $1,901.39 $1,070.20 $356.73 $1,426.93 $372,429.60 $69.58 $372,429.60 $662,611.32 Comm Indemnity Health = Blue Care Elect RMT Individual 7 $56,420.28 $671.67 $118.52 $790.19 $465.58 $155.19 $620.77 $39,108.72 $36.67 $39,108.72 Family 2 $38,741.76 $1,614.24 $287.15 $1,901.39 $1,167.09 $389.03 $1,556.12 $28,010.16 $101.88 $28,010.16 $67,118.88 Tufts Secure Medicare Preferred = Medex Plan Family/ Desig. Individual Enrollees RMT Individual T 7 $12,625.20 $150.30 $16.70 $167.00 $287.62 $95.87 $383.49 $24,160.08 $79.17 $24,160.08 Totals 270 $1,758,453.84 $1,302,669.84 $1,324,762.68 Total GIC cost to city
(add. Cost of split change) $22,092.84