Board Reviews Proposed Health Care Program Changes for 2022 Plan Year
At the April meeting of the State Teachers Retirement Board, Member Benefits staff presented the board with several proposed changes for the STRS Ohio Health Care Program for plan year 2022. The proposed changes will have a positive impact on premiums and offset some of the expected rate increases. Staff will provide an initial review of premiums for 2022 at the May board meeting.
Proposed health care plan changes under consideration include:
- Decreasing drug maximum out-of-pocket limit to $5,100 from $6,500 for the Medicare plans, below the 2022 standard Part D limit of $7,050; maintain the $5,100 out-of-pocket limit for non-Medicare enrollees.
- Fully funding of hospital coverage for Medicare enrollees with Part B-only coverage through the Health Care Fund rather than through enrollee premiums. This should result in a premium reduction for all Medicare enrollees.
- Moving to Express Scripts’ National Preferred Formulary for non-Medicare enrollees and to the Premier Performance Formulary for Medicare enrollees. This will add a third tier — giving enrollees access to non-preferred brand name drugs while also providing greater rebates to offset premium increases.
- Reducing the specialty copay to the lesser of 8% of costs or $450 from the lesser of 13% of costs or $450.
The Retirement Board is expected to vote on health care program changes at its May meeting.
Proposed STRS Ohio Operating Budget for Fiscal Year 2022 Reflects Slight Increase From Current Year Budget
STRS Ohio’s Finance Department presented its proposed system budgets for fiscal year 2022 (July 1, 2021–June 30, 2022). The proposed operating budget totals $106 million, an increase of 1.7% from the current year budget. The budget proposal reflects 530 full-time equivalent associates, the same as the current year budget, following seven straight years of headcount declines. The proposed budget includes increases for the actuary and investment consultants to conduct the upcoming five-year experience review and asset-liability study. The proposed budget also includes a 1.4% increase in the Salary & Wages line item, as well as increases to expand cloud backup of data to enhance disaster recovery capabilities and lower future costs in this area. The proposed budget also reflects decreases in staff and board travel and seminars and conferences as travel isn’t expected to resume to a more normalized level until the second half of the fiscal year.
The proposed capital budget for fiscal year 2022 totals $9.1 million, an increase of about $4 million dollars over the current year’s budget. This includes information processing and computer software costs to replace the system’s 25-year-old investment accounting system. Fiscal 2022 State of Ohio expenses include an increase in Ohio Retirement Study Council expenses to cover the upcoming fiduciary and actuarial audits conducted under the oversight of the Council.
Board Recognizes Chief Investment Officer Morrow for Outstanding Service
The Retirement Board recognized John Morrow who is retiring after 31 years at STRS Ohio, including the past eight years as chief investment officer and deputy executive director — Investments. The board noted Morrow’s personal connection to serving the STRS Ohio membership, with some of his immediate family in the educator community. The board also recognized his commitment to developing internal staff to manage about 70% of system assets, saving the retirement system about $100 million each year instead of using external money managers.
The Retirement Board approved 85 active members and 60 inactive members for service retirement benefits.
Other STRS Ohio News
STRS Ohio Earns Auditor of State’s Top Rating for Transparency
In conjunction with Sunshine Week, Ohio Auditor Keith Faber shared the results of more than 2,800 reviews of Sunshine Law compliance. The auditor’s office launched its StaRS (Star Rating System) program in 2019 in an effort to promote government transparency. In the first year of the StaRS program, STRS Ohio received the Highest Achievement in Open and Transparent Government Award, the highest possible rating from the auditor’s office. This rating was awarded to only 14% of audited entities. STRS Ohio was recognized for “Best Practices” in six areas.