Why so much attention on re-employment?

Ohio Township Association 2016 Annual Winter Conference OPERS Updates Jan. 28 29, 2016 Tracy Johnson, OPERS Educator Laura Norman, OPERS Sr. Employer Compliance Specialist Jason Davis, OPERS Health Care Educator Why so much attention on re-employment? If a retiree health care plan has two or more re-employed retirees in it, it is considered an employee plan. Federal health care laws and regulations provide that a stand-alone HRA is available only for retirees and cannot permit the participation of active public employees, including re-employed retirees. The OPERS Medicare Connector will have what is called a standalone HRA to support the allowance administration. To protect the status of the health care plan as retiree only, the OPERS Board of Trustees approved separating the re-employed retirees into a stand-alone plan. For purposes of this discussion we will separate the re-employed retirees into two groups: Non-Medicare and Medicare 2

Who is a Re-employed Retiree? A re-employed retiree is a retiree who receives an OPERS pension and also works for an OPERS-covered employer, regardless of whether contributions will be remitted to OPERS. Facts At-A-Glance: Currently there are 203,112 OPERS retirees 11,192 are re-employed (approximately 5.5 percent) Examples of re-employed retirees: Full-time and part-time workers Intermittent/seasonal/casual workers Library substitutes, parks and recreation positions, holiday positions 3 What is the role of the public employer? Encourage the worker to contact OPERS to review any potential impact on pension benefit or health care. Notify OPERS when hiring an individual as: an employee under a personal services contract as an independent contractor regardless of whether retirement contributions will be remitted to OPERS regardless of length of time individual will be employed and/or providing services How do you notify OPERS? Submit form SR-6/SR-6E (Notice of Re-employment of an OPERS Benefit Recipient/Notice of Re-employment of a Retired Elected or Appointed Official to an Elected Position) 4

What is the role of the public employer? Notify OPERS when re-employed retirees terminate public employment (regardless of whether retirement contributions were remitted). For re-employed retirees that have contributions being remitted: Add PPE (pay period end) code of Q in ECS For re-employed retirees that do not have contributions being remitted: Submit form Term-MP (Employer Certification Of Termination Of Employment OF An OPERS Benefit Recipient) Enhancements to ECS 5 ECS enhancements: SSN Look Up 6

ECS enhancements: Enhanced Form A/SR-6 7 ECS enhancements: Enhanced Form A/SR-6 8

ECS enhancements: Enhanced Form A/SR-6 9 ECS enhancements: Term-MP 10 10

Denied Salary ORC 145.2916 Elected officials whose salary is increased during a term of office and who are not eligible to receive the additional salary due to constitutional provisions may make additional contributions to OPERS. Additional contributions will be based on the amount the official and the employer would have contributed had the salary increase been received. 11 Denied Salary The elected official making the election must contribute both the member and employer contributions. The employer must withhold beginning with the period the elected official elected to participate in denied salary and transmit it to the retirement system. The election cannot be retroactive. 12

Denied Salary Denied in-term increase: does not count toward health care service credit cannot be used to make an elected official eligible to purchase 35% additional credit is used in the calculation of final average salary (FAS) for retirement benefit 13 Denied Salary Employer must submit the Certification of Denied Interm Salary Increase (form CSH-6) Employer must certify: current salary actual denied increase effective date of increase Contributions reported on Report of Retirement Deduction of Denied In-term Salary (form 4710-d) OPERS will provide form to employer 14

GASB 75 OPEB (Other Postemployment Benefits) addresses accounting and financial reporting requirements for OPERS public employers GASB Statement No. 75 will be effective for public employers for fiscal years beginning after June 15, 2017 accounting requirements for financial reporting of health care unfunded liabilities will be modified not the funding of health care OPERS will provide proportionate share information on the net OPEB liability to employers and require employers to include their share of the net OPEB liability, and related activity, on their financial statements 15 Open Enrollment for re-employed retirees Non-Medicare re-employed retirees were automatically enrolled in the Medical Mutual Interim Plan effective 1/1/16 Re-employed Medicare retirees must have completed and returned open enrollment application by 12/31/15 for themselves and any Medicare dependents to enroll in Humana Interim Plan effective 1/1/16 Medicare re-employed retirees and their dependents are not eligible for an HRA if they enroll in a medical plan through OneExchange (Connector) Participants enrolled OPERS 2015 vision and/or dental plans were automatically enrolled for 2016 16

2016 Re-employed Retiree Health Care Plans and Cost Non-Medicare Medical 2015 2016 Deductible (In-Network) $850 $1,000 Total (In-Network) Out-of-Pocket Max $3,350 $4,900 Deductible (Out-of-Network) $1,500 $2,000 Total (Out-of-Network) Out-of-Pocket Max $4,500 $7,000 Office Visit (Medical Home) $10 $15 Office Visit Copay (PCP) $20 $25 Office Visit Copay (Specialist) $35 $40 Office Visit Copay (Chronic Conditions) $10 (PCP) $20 (Specialist) Discontinued *Additional enrollee cost-share if non-preferred providers are used for lab work subject to coverage maximums. 17 2016 Re-employed Retiree Health Care Plans and Cost Non-Medicare Medical 2015 2016 Inpatient Deductible $150 No Change Emergency Room $150 (emergency) $250 (non-emergency) No Change Preventive Services 100% No Change Skilled Nursing/Hospice 100% No Change Other Medical Services* 20% Co-insurance 25% Co-insurance *Additional enrollee cost-share if non-preferred providers are used for lab work subject to coverage maximums. 18

2016 Re-employed Retiree Health Care Plans and Cost Prescription Drug 2015 NMCR 2015 MCR 2016 All Retail Pharmacy Network 55K pharmacies N/A No Change Annual Deductible(s) $100 (brands only) $100 (brands only) $100 (generics) $200 (brands) Formulary High Performance N/A No Change Generics $4 Retail/$10 Mail $4 Retail/$10 Mail Formulary Brand 30% Co-insurance: $30 min/$60 max Retail $75 min/$150 max Mail 30% Co-insurance: $20 min/$30 max Retail $50 min/$75 max Mail 20% Co-insurance: $4 min/$8 max Retail $10 min/$20 max Mail No Change Non-Formulary Brand NOT COVERED NOT COVERED No Change 19 2016 Re-employed Retiree Health Care Plans and Cost Prescription Drug 2015 NMCR 2015 MCR 2016 All Specialty Drugs VBID Generics for chronic conditions VBID Diabetes items for DM participants OTC/Generic PPIs (heartburn meds) 40% Coinsurance: $60 max 40% Coinsurance: $60 max 40% Co-insurance: $150 max $0 N/A No Change $0 N/A 50% Co-insurance: $15 Retail/$40 Mail min OTC Not Covered Generic: $4 Retail/$10 Mail 30% Co-insurance: $30 min/$60 max Retail $75 min/$150 max Mail No OTCs, Generic: 50% Co-insurance: $25 Retail/$62.50 Mail min Brand PPIs NOT COVERED NOT COVERED No Change Maximum Out-of- Pocket $3,250 $3,250 $1,950 (per ACA limits) 20

2016 Re-employed Retiree Health Care Plans and Cost Medicare Medical (Humana Interim Plan) 2015 2016 Deductible $250 $500* Total Out-of-Pocket Max $850 No Change Office Visit Copay (PCP) 4% No Change Office Visit Copay (Specialist) 8% No Change Emergency Room/Urgent Care $50 No Change Preventive Services 100% No Change Skilled Nursing/Hospice 100%/95% No Change Other Medical Services 4% No Change 21 2016 Re-employed Retiree Health Care Plans and Cost Full plan premiums are set every year and are based on many factors including Cadillac Tax, utilization and inflation. OPERS will offer an allowance to retirees and spouses (spouse allowance ends in 2018) selecting the re-employed group plan to help offset the full premium. Allowance amounts from OPERS will range from 51 percent to 90 percent of the full plan premium. Allowance percentages are determined by the retiree s years of public service and age when first enrolled in OPERS health care. Spouse allowances will transition to $0 by 2018. 2016 full plan monthly premiums: Non-Medicare plan - $968.54 Medicare - $399.17 22

Moving in and out of employment What happens if I start and stop my employment? Approximately 28 percent of re-employed retirees went in and out of re-employment with an OPERS employer in 2014. (Churning) Intermittent re-employed retirees may work very few hours; some may work part-time to supplement pensions others may work full-time. Some may be simply helping out at the library or in the courtroom on a sporadic basis as intermittent workers. If Medicare retirees go back and forth between their Connector plan (or the OPERS group re-employed retiree plan) or their employer s plan they may have to meet a new annual deductible each time they enter the plan. 23 Moving in and out of employment Medicare Retirees Can Churn (between the Connector Plan and the OPERS group re-employed retiree plan) One Time: Once the Medicare retiree becomes re-employed, his/her HRA is frozen. Working for any length of time during a given month freezes the HRA for the entire month. At this point they can stay in the plan they selected with the Connector (with no HRA allowance) or leave that plan and enroll in the OPERS group re-employed retiree plan with an allowance for that plan. If the Medicare retiree is no longer re-employed, his/her HRA will be unfrozen and they would go back to a plan on the Connector (assuming they didn t leave) or re-enroll in a plan through the Connector. 24

Moving in and out of employment Allow Medicare Retirees to Churn One Time (continued): If they become re-employed again, their HRA will be frozen and they have the option to return to the OPERS group re-employed retiree plan or stay in their Connector plan without an allowance. In any event their HRA will remain frozen until the next open enrollment period (January). At that point if they are now fully retired again their HRA will be unfrozen and they can select a plan through the Connector, if they left their plan when they became re-employed. Current Benefit Year Retired Re-employed Retired Re-employed Retired In HRA frozen. HRA frozen. Group RR plan Connector Group RR plan Group RR plan In Connector plan w/ HRA w/ allowance (HRA frozen) plan w/ HRA w/ allowance available. w/ allowance available. One Churn 25