Workshops held for changes in retiree health insurance

by | Apr 15, 2013 | Not In USe

By Randy Bowman, Conference Benefits Officer

Workshop-1During the last week of March, we held a series of workshops in Phoenix, Tucson, and Las Vegas to discuss upcoming changes in how health insurance will be provided for our retirees.  Over 50 retirees attended—nearly half of our retired health plan participants.

Effective 1/1/14, we will switch from a group health insurance plan through the General Board of Pension & Health Benefits (“GBOPHB”) to individual plans through Extend Health. The workshops addressed many questions related to this change.

Why do we need to change?

There are two main reasons. First, we have to since the GBOPHB will not offer group plans after next year since so many conferences have already switched to Extend Health.

Second, the switch to Extend Health and fixed dollars subsidies will ensure that our retiree subsidies are financially sustainable over the long term. The switch will reduce our retiree health insurance liability from $21 million to a manageable $8 million (we have $6 million in assets to fund that liability).  Without the switch, we estimate we would need to increase apportionments by $100,000 per year each and every year for 20 years.  That’s obviously not feasible.

How will this work?

Right now, the conference pays 75% of retiree health insurance premiums and the retirees pay the other 25%.  Retirees will no longer have to pay the conference that 25%. Additionally, the conference will fund $200 per person per month into a health reimbursement account (“HRA”) that can be used by a retiree to pay their health insurance premiums or out-of-pocket costs. If the entire HRA isn’t used, the balance is carried over to the next year.

In about 85% of cases, we expect that a retiree’s costs will be the same or lower than they are under the current group plan. The conference will be willing to consider requests for additional hardship financial assistance if they have significant increases in out-of-pocket costs.

What will we have to vote on at Annual Conference?

The only thing the annual conference delegates need to vote on is a rule change to switch from a percentage subsidy to a fixed dollar subsidy of $200 per person per month. Again, this is necessary to be fair to everyone.

Where do we go from here?

The recent workshops were just the first step. We will have a representative from Extend Health available all day on Wednesday, 6/26/13, at Annual Conference to answer questions from retirees.

We will have another series of workshops on the Extend Health enrollment process on September 3 in Tucson (9:00 -11:00 a.m. at Christ Church UM), September 3 in Phoenix (3:00 – 5:00 p.m. at the Conference Center), and September 4 in Las Vegas (1:00 – 3:00 p.m. at Trinity UMC).

In October, Extend Health will begin conducting phone calls (usually lasting 2 hours or more) to help advise retirees on the health insurance plan that best meets their needs. The retirees will then be enrolled and ready to use their new plan as of 1/1/14.

Randy Bowman is the Desert Southwest Conference Treasurer and Benefits Officer.

Randy Bowman is the Desert Southwest Conference Treasurer and Benefits Officer.

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Author: DSC

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