Health Care Fund Status Update
The annual actuarial valuation of STRS Ohio’s Health Care Fund shows that strong investment returns and good claims experience had a positive effect on the fund. In addition, limiting future subsidy increases for Medicare enrollees to 6% and freezing future subsidies for non-Medicare enrollees significantly improved the funded status. The fund balance as of Jan. 1, 2018, was $3.69 billion — an increase of $469 million from the previous year’s valuation report. Segal Consulting said assuming the fund earns 7.45% in all future years and all other plan experience matches assumptions, the fund is now projected to remain solvent for all current members.
The valuation also showed that benefit payouts for 2017 totaled $517 million, an average of more than $1.4 million per day. The positive news for the Health Care Fund is tempered somewhat by the volatile nature of various components of the valuation report. Examples of these components include investment returns, government subsidies and rebates, plan enrollment and utilization, and Affordable Care Act taxes. These were areas that led to gains for the Health Care Fund in 2017, but are not predictable for 2018 and beyond. The health care valuation report is completed on an annual basis; however, the timing of the next health care valuation has been moved to July 1, 2018, to align with the next pension valuation.
In the months following the health care valuation, the board has discussed steps that STRS Ohio could consider to reduce the investment rate of return volatility for the Health Care Fund. Staff shared potential pros and cons of lowering the investment risk in the fund portfolio. Staff shared that with no current employer funding, the Health Care Fund is more susceptible to the economic cycle, and reducing investment risk means reducing the severity of possible negative investment return outcomes. However, reducing investment risk would also reduce some potential gains if investment markets continue to climb significantly above current levels. The board indicated it will continue its discussion on the Health Care Fund at future meetings.
Board Approves Health Care Premiums for 2019; More Than 90% of Enrollees Will See No Premium Increase
During the May meeting of the State Teachers Retirement Board, the board approved 2019 premiums for all plans offered through the STRS Ohio Health Care Program. When determining premiums, the board and staff work with health care consultants and actuaries to consider the claims experience of plan enrollees, annual expected cost increases for health care (trend rates) and administrative expenses of the program. Premiums approved by the board show that about 92% of plan enrollees will have 2019 health care premiums equal to their 2018 premiums. Lower than anticipated health care claims during the review period for STRS Ohio’s self-insured plans had a positive impact on the 2019 premiums.
2019 Health Care Premiums
A sampling of the approved 2019 premiums are shown below. A complete list of premiums is available here.
Monthly Enrollee Premiums for 2019 — With Medicare
|Benefit Recipient Years of Service||Aetna Medicare Plan (Medicare Advantage PPO)
Total Cost: $342
|Medical Mutual Basic (Indemnity or PPO)
Total Cost: $300
Total Cost $473
|Paramount Elite HMO (Medicare Advantage)
Total Cost: $359
Monthly Enrollee Premiums for 2019 — Without Medicare
|Benefit Recipient Years of Service||Aetna Basic/Medical Mutual Basic (Indemnity or PPO)
Total Cost: $957
Total Cost $890
|Paramount Health Care (HMO)
Total Cost: $946
*Members who retired before Jan. 1, 2004, with less than 15 years of service credit have access to the STRS Ohio Health Care Program but pay the full cost of the premium. Members who retire on or after Jan. 1, 2004, and before Aug. 1, 2023, must have at least 15 years of qualifying service credit to have access to coverage. Members who retire on or after Aug. 1, 2023, must have at least 20 years of qualifying service credit to have access to coverage.
Board Extends Medicare Part B Reimbursement for One Year
The Retirement Board approved a one-year extension of the current Medicare Part B Partial Reimbursement Program. Under this program, benefit recipients currently enrolled in the STRS Ohio Health Care Program and Medicare Part B receive $29.90 per month to reimburse a portion of the Medicare Part B premium. About 85,000 benefit recipients receive this reimbursement that was set to be reduced to $0 beginning Jan. 1, 2019. The board’s action at the May meeting extends the $29.90 per month reimbursement through the 2019 calendar year.
STRS Ohio Provides Dental and Vision Coverage Details, Premiums for 2019–2020
The Retirement Board approved premiums for dental and vision coverage for the next two-year enrollment period, 2019–2020. Coverage for Delta Dental remains the same as under the current two-year contract and premiums remain essentially the same. Premiums for Delta Dental coverage for a benefit recipient will be $30.38 per month starting in 2019, and coverage for a benefit recipient along with another adult will be $70.29 per month ($30.38 for the benefit recipient and $39.91 for the other adult).
Vision coverage under Vision Service Plan’s (VSP) network also remains the same as under the current two-year enrollment contract and premiums remain essentially the same. Premiums for VSP coverage for a benefit recipient will be $6.82 per month starting in 2019, while coverage for a benefit recipient and another adult will be $13.53.
The two-year enrollment contract period applies to all eligible enrollees. This means once a person enrolls in the vision and/or dental plan, he or she must remain in the plan through December 2020. A complete list of premiums and coverage features for VSP and Delta Dental will be provided to benefit recipients during this fall’s open-enrollment period.
Open-Enrollment Materials Will Be Available to Eligible Benefit Recipients in October
In late October, STRS Ohio will provide open-enrollment materials to benefit recipients who are eligible for dental and vision coverage. Benefit recipients currently enrolled in a medical plan will also receive a packet. Members who have requested the paperless delivery option will receive an email when the materials are available online, while the rest will be sent by mail. The materials will include personalized information about 2019 medical plan options and premiums, as well as details about dental and vision coverage for 2019–2020. STRS Ohio will also post open-enrollment information on our website.
Limited Plan Design Changes for 2019
For the 2019 health care plan year, the only plan design change is a $100 increase in the out-of-pocket limit for prescriptions, to $5,100 from $5,000. This is the only change to the health care plan design for the upcoming year. Benefit recipients who have questions after receiving their open-enrollment materials are welcome to contact STRS Ohio’s Member Services Center toll-free at 888‑227‑7877.
STRS Ohio Offers Health Care Assistance Program
STRS Ohio offers a Health Care Assistance Program (HCAP) that is designed to help qualified benefit recipients who need financial assistance to pay their STRS Ohio health care premium. The Retirement Board approved the program to continue in 2019 with a $0 premium.
New HCAP applicants must be eligible for a premium subsidy under the STRS Ohio Health Care Program to quality for HCAP enrollment. Benefit recipients, survivors and beneficiaries who have been continuously enrolled since Dec. 31, 2015, are not subject to the subsidy requirement as long as they continue to meet all other HCAP requirements and remain continuously enrolled in the program.
If you think you may qualify for this program, you can print an HCAP application or call STRS Ohio to request an application. HCAP participants are asked to recertify eligibility for the program each year. The application deadline to recertify eligibility for current HCAP enrollees is July 27, 2018. New enrollees may apply at any time.