[bfsa] Fwd: OEA Retirement Systems Update

[Brenda Scarborough]

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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