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OPERS Health Care Plan

OPERS Health Care Plan. OPERS. OPERS serves more than ½ million Ohio public employees and benefit recipients 10 th largest state pension system in the U.S., 17 th largest in the world We strive to minimize cost increases for members, retirees and employers

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OPERS Health Care Plan

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  1. OPERS Health Care Plan

  2. OPERS OPERS serves more than ½ million Ohio public employees and benefit recipients 10th largest state pension system in the U.S., 17th largest in the world We strive to minimize cost increases for members, retirees and employers Our health care plan allows for maximum flexibility for adjustment if conditions become more favorable

  3. The Health Care Challenge Double digit health care inflation Baby Boomers – retiree population will double in 20 years Workers are retiring younger and living longer

  4. Medical Rx Actively managing costs • Dual-vendor PPO, HMOs • Co-pays that encourage use of network providers • Exclude or limit services based on necessity • Plan design encourages generics, use of mail order pharmacy • Prior authorization as appropriate • Formulary incentives

  5. Key Points • Employees with less service will pay more for health care than those with more service • Those who are retired or near retirement will be less affected • by plan changes because they have fewer years to plan and save • Changes will be phased in over 5 years • Plan participants may share cost of health care inflation • OPERS Health Care Plan will be offering various levels of coverage and cost to retirees and benefit recipients beginning January 2007

  6. Health Care Plan Options Coming in 2007 • A monthly health care allowance from OPERS based on a retiree’s length of service from 10 to 30 years • Benefit recipient is able to use the allowance to select health plan coverage, choosing from a cafeteria-style plan

  7. The Groups Group One Current retirees and those near retirement (eligible to retire with health care coverage by January 1, 2007) Group Two Future retirees (eligible to retire after January 1, 2007) Group Three Future/Recent Hires (Hired after January 1, 2003)

  8. Group One Current retirees and those near retirement (eligible to retire with health care coverage by January 1, 2007) • Receive 100% allowance • Spouse receive 75 – 90% of retiree allowance • Spouse premium increase is phased in over 5 years (20% per year) Effective January 1, 2007

  9. Group Two • Future retirees (eligible to retire with health care coverage after January 1, 2007) receive graded allowance based on years of service: • 50% allowance with 10 to 15 years of service • 100% allowance with 30 years of service • Spouse receive 50 – 90% of retiree allowance depending on years of service Effective January 1, 2007

  10. Group Two Graduated effective dates Graduated approach applies: If first eligible for retirement with health care between 01/01/2007 and 12/31/2010. This calculation basis locks in, e.g., if you are first eligible in 2008, your allowance is based on the 2008 chart regardless of when you actually retire!

  11. Groups One & Two! It makes NO difference when you actually retire! What matters is… “When are you first eligible to retire?”

  12. Group Three • Recent/Future Hires • (Hired January 1, 2003 and after) • 25% allowance with 10 to 15 years • 100% allowance with 30 years • Spouse receives 50-65% of retiree allowance depending on years of service Effective January 1, 2007

  13. Health Care Plan Structure Our Enhanced plan, same as the current health care plan The Intermediate plan, priced at 80% of the Enhanced plan The Basic plan, priced at 60% of the Enhanced plan

  14. Any excess goes into a Retiree Medical Account (RMA) Can be used for additional/future health care expenditures Can be rolled over from year to year If the selected options exceed the monthly allowance, the benefit recipient pays the difference In subsequent years, monthly allowance will increase by wage inflation. Excess health care inflation up to 5% may be the member’s responsibility Health Care Plan Features

  15. Plan Design Non-Medicare Medical Enhanced Plan (same as current plan) Intermediate Plan Basic Plan Deductible In - $150 / $300 Out - $200 / $400 In - $750 / $1,500 Out - $1,500 / $3,000 In - $2,000 / $4,000 Out - $4,000 / $8,000 Copay OV - $15; ER - $75 OV - $25 N/A Coinsurance In – 80% (after deductible) Out – 60% (after deductible) In – 80% (after deductible) Out – 60% (after deductible) In – 70% (after deductible) Out – 50%(after deductible) Out-of-Pocket Max In - $750 / $1,500 Out - $1,500 / $3,000 In - $3,000 / $6,000 Out - $6,000 / $12,000 In - $5,000 / $10,000 Out - $10,000 / $20,000 Enhanced Plan (same as current plan) Prescription Drug Intermediate Plan Basic Plan Retail Copay $5 / $10 / $25 $15 / $35 / $50 N/A Mail Order Copay $10 / $20 / $50 $30 / $70 / $100 N/A Deductible N/A N/A $500 / $1,000 Coinsurance N/A N/A 65%-Generic/Form Brand 50% - Non-Form Brand Out-of-Pocket Max $1,500 $2,000 / $4,000 $3,000 / $6,000

  16. Deductible $150 / $300 $400 / $800 $900 / $1,800 Plan Design with Medicare Enhanced Plan (same as current plan) Medical Intermediate Plan Basic Plan Copay N/A N/A N/A Coinsurance 80% (after deductible) 80% (after deductible) 80% (after deductible) Out-of-Pocket Max $750 / $1,500 $1,000 / $2,000 $1,500 / $3,000 Enhanced Plan (same as current plan) Prescription Drug Intermediate Plan Basic Plan Retail Copay $5 / $10 / $25 $15 / $35 / $50 N/A Mail Order Copay $10 / $20 / $50 $30 / $70 / $100 N/A Deductible N/A N/A $500 / $1,000 Coinsurance N/A N/A 65% - Generic/Form Brand 50% - Non-Form Brand Out-of-Pocket Max $1,500 $2,000 / $4,000 $3,000 / $6,000

  17. Benefit recipient – 100% of the cost of the enhanced plan in 2007 (or the year you actually retire after 2007) With $800 allowance, can choose from: Enhanced Plan - $800 Intermediate Plan - $640 Basic Plan - $480 Example Assuming - Group OneUnder 65, assumed plan cost is $800/month, 10 years service

  18. Example Assuming - Group OneUnder 65, assumed plan cost is $800/month, 10 years service Dependent’s allowance - Based on length of service, 75% of the benefit recipient’s amount Assuming allowance is $600: ( $800 x 75%) • Enhanced Plan - $800 • Intermediate Plan - $640 • Basic Plan - $480

  19. Calculating your benefit - Group One Assuming Intermediate Plan Selected Health Care Allowance for Member $800.00 Cost to Member for Intermediate Plan $640.00 Excess $160.00 Health Care Allowance Spouse $600.00 Cost for Spouse in Intermediate Plan $640.00 Monthly Cost to member -$ 40.00 Balance to RMA $120.00

  20. Income-based Discount Program (30% premium reduction) Treatment of dual OPERS households Purchasable service credit Disability & Survivor recipients will receive monthly allowance based on years of service, with 10 year level as a “floor” Dependent(s) allowance/premiums determined by number of eligible children Additional Considerations

  21. Changes will be phased in over 5 years Both the allowance and the cost of the medical plans change proportionately when the retiree becomes Medicare eligible Group is determined by the year in which one is first eligible to retire with health care It does not matter when you actually retire! Points to Remember

  22. OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM Office Hours 7:30 – 4:30 Weekdays 277 E. Town Street Member Services Center 7:30 – 5:00 Weekdays 1-800-222-7377 Columbus, Ohio 43215 www.opers.org healthcare@opers.org

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