Board Approves Health Care Plan Enhancements for 2024
The Retirement Board approved several changes to the STRS Ohio Health Care Program for 2024, including new premiums lowering the monthly cost for 99% of current plan enrollees. In addition, the board eliminated the in-network deductible for the Aetna Medicare Plan. In 2024, Aetna will become the plan administrator for all enrollees, and CVS Caremark will provide prescription coverage. An overview of the plan changes is provided below. Please watch for more coverage details in upcoming announcement letters and newsletters, as well as in your health care open-enrollment packet in late October.
Medical plan transitions to Aetna
- All Medical Mutual, AultCare, Paramount and Health Care Assistance Plan (HCAP) enrollees will be covered by Aetna in 2024. Current Aetna enrollees will remain in their current plan.
- The Aetna Medicare Plan is making several coverage improvements, including a $0 in-network annual deductible and $0 copay for in-network primary care physician visits.
Pharmacy plan transitions to CVS Caremark (CVS) from Express Scripts
- All enrollees will transition to CVS; the majority of enrollees should experience no disruption to their service. Those who may see a disruption (such as a change to a higher or lower tier in the drug formulary) will be notified by mid-December.
- The CVS network includes about 66,000 chain and independent pharmacies, including Kroger, and about 9,000 CVS pharmacies. (Enrollees can use any in-network pharmacy; they are not limited to CVS store locations.)
- There are no changes to the prescription annual deductible, maximum out-of-pocket limit or drug tier copayments/coinsurance.
- Medicare enrollees will be covered by SilverScript, a Medicare Part D plan. SilverScript is an affiliate of CVS. Non-Medicare enrollees will be covered by CVS Caremark.
Access to Providers
Aetna’s provider network includes nearly all the providers currently being utilized by Medical Mutual, AultCare and Paramount enrollees. The same is true for CVS’s network. It covers nearly all ESI pharmacies currently being accessed.
2024 Health Care Premiums
|Plan||Premium With Medicare Part B Credit|
|Aetna Medicare Advantage Plan||$25|
|Aetna Basic Plan||$137|
|Aetna Basic HCAP*||$0|
Aetna Basic Plan
|Aetna Basic HCAP*||$0|
*Health Care Assistance Plan
STRS Ohio Investments Post Net Return of 7.55%
At the August Retirement Board meeting, STRS Ohio reported that the pension fund posted a net return of 7.55% for the year ended June 30, 2023. This translates into $2.4 billion more for the teachers of Ohio, even after payment of more than $7 billion in benefits. The pension fund ended fiscal year 2023 with $90.1 billion in investment assets.
As a mature pension system that pays out more in benefits than it receives in contributions, STRS Ohio relies on the performance of its investments as a key source for funding benefits.
STRS Ohio’s investment consultant, Callan, shared that STRS Ohio’s total fund return outperformed its benchmarks and ranked in the top 10% of public funds tracked by Callan for the three-, five- and 10-year periods ending June 30, 2023.
Board Approves Changes to Performance-Based Incentive Program for 2024
The board approved several changes to the Performance-Based Incentive (PBI) Program that is part of the compensation package for eligible Investment staff. Such programs are common among large pension plans like STRS Ohio that manage a significant portion of assets with internal staff instead of outside money managers.
The changes approved for fiscal 2024 (current fiscal year) include:
- Removing more than 30 positions from the PBI Program.
- For those still participating in the PBI Program, reducing the maximum incentive possible.
- A simplified formula to calculate PBI reductions when the pension fund has a negative absolute return.
- A 10% reduction to PBI payments in any year where the board’s actuary determines there is not sufficient funding to enhance member benefits.
Based on the performance of STRS Ohio investments for fiscal year 2023 and the trailing five-year period, the board approved approximately $8.6 million in performance-based incentive payments. Incentives are more heavily weighted to five-year returns, aligning with STRS Ohio’s interests as a long-term investor.
Lard Recognized for Board Service
The Retirement Board recognized Arthur Lard for his years of service as a board member and thanked him for serving his fellow educators. Both the pension and health care funds showed increased sustainability during his time on the board, and benefits were enhanced for active and retired members.
The Retirement Board approved 1,689 active members and 152 inactive members for service retirement benefits.