[bfsa] Fwd: OEA Retirement Systems Update
Brenda Scarborough
bmscarborough at ysu.edu
Wed Sep 19 09:38:23 EDT 2007
Frank Betsa, VP YSU-ACE wrote:
>OEA Retirement Systems Update
>
>Report to the OEA Board of Directors: September 2007
>
>Please distribute to other OEA members
>
>Collaboration Leads to Savings and New Pharmacy Benefits Manager
>
>SERS, STRS and OPERS have joined together in a collaborative effort to
seek a pharmacy benefit manager for retiree prescription drug benefits.
Through this joint venture, called the Rx Ohio Collaborative (ROC), the
systems will be able to leverage their collective purchasing power for
the benefit of their current and future retirees.
>
>The first venture under ROC was to solicit bids for a pharmacy benefit
manager (PBM) that could serve all three systems' health care programs.
The Ohio State University also joined the retirement systems in this
effort. In total, the partners in this initiative provide pharmacy
benefits to over 400,000 Ohioans and utilize more than $1 billion
annually in prescription drugs.
>
>In evaluating PBM candidates, the systems not only were looking for the
best unit price or discounts on prescription drugs, but also assessing
vendors' ability to help support and manage drug utilization over time.
Companies were rated in several areas, including pricing, formulary
management, volume-based incentives, innovation, administrative
simplicity, and economic incentives. Finalists made presentations to
ROC participants, and retirement system staff visited company customer
service and distribution facilities.
>
>Express Scripts was chosen as the PBM that best met the strategies and
goals of the retirement systems. As a result of this process, it is
estimated that the systems could collectively spend $307 million less
over the next three years for prescription drug coverage.
>
>SERS Moves to Medicare Advantage Plans
>
>The SERS Board has adopted health care premiums for 2008. For the
majority of retirees, the premium rates will be lower than the previous
year. Premiums for those who are over 65 and Medicare eligible will be
decreasing as a result of a switch to Medicare Advantage plans. Most
retirees with Medicare are now paying 17.5% of the monthly cost, or
$45; this rate will decrease to $39 in 2008. With the exception of
AultCare health plan, premiums for retirees without Medicare will
increase for 2008. The Aetna and Medical Mutual PPO rates will be
about 9% higher.
>
>
>
>Under a Medicare Advantage Plan, insurance companies receive a subsidy
from the federal government for each Medicare enrollee, and the plans
must provide Medicare-equivalent benefits. The Medicare Advantage plan
replaces traditional Medicare. SERS has negotiated enhanced benefits
beyond traditional Medicare levels. Benefits for SERS retirees
include:
>
> a.. No yearly deductible
> b.. No Medicare maintenance of benefits
> c.. 100% coverage for preventive care according to Medicare
guidelines
> d.. A $25 office visit co-pay, except for the preventive care visits
> e.. 100% hospital coverage after payment of a $250 hospital admission
charge
>Medicare Advantage plans are not without controversy. Many advocacy
groups have criticized these plans as an attempt to privatize Medicare,
taking aim at the federal subsidy the insurance companies receive as an
overpayment that enriches private companies and drains resources from
Medicare. Medicare Advantage plans are paid 12% more than traditional
Medicare for the cost of treating comparable beneficiaries. Congress
continues to debate whether to continue this policy.
>
>OPERS will be offering a Medicare Advantage plan in 2008 through Aetna.
Recently, the STRS Board voted against piloting a Medicare Advantage
plan on a voluntary basis.
>
>ORSC Disapproves of HB 152
>
>On Wednesday, September 12, 2007, the Ohio Retirement Study Council
(ORSC) recommended that the General Assembly not approve House Bill
152. The bill, sponsored by Representative Chris Widener
(R-Springfield), would require school districts to offer private
alternative retirement plans to employees. OEA is strongly opposed to
House Bill 152 and has testified in opposition before the House
Financial Institutions, Real Estate and Securities committee.
>
>The ORSC report cited a number of reasons to oppose the bill including
that defined contribution plans are already offered by STRS, not in
great demand, not widespread in other states for K-12 employees, and
adoption of the bill would have a negative financial impact on the
retirement systems. The ORSC voted 5-2 in favor of the staff
recommendation to oppose HB 152. Representative Lynn Wachtmann
(R-Napoleon) and Senator Keith Faber (R-Celina) voted against the
motion.
>
>OPERS Retools Website
>
>OPERS has redesigned and added new features to its website. After
analyzing usage trends, the most commonly viewed information has been
made more accessible from the home page. In addition, the site has an
enhanced search engine and easier access to member-specific benefit
information. To see what's new, members are encouraged to visit
www.opers.org.
>
---------------------------------------
Brenda Scarborough, LMTA II
Maag Library/Information Services
Youngstown State University
One University Plaza
Youngstown OH 44555-0001
t:(330)941-3126 e:bmscarborough at ysu.edu
f:(330)941-3734
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