January 2001 |
| Retirement
System |
What
involvement, if any, does your retirement system have in providing
health care for retired teachers (and non-certified staff if your
system also covers them)? |
If
your retirement system is involved (to whatever extent), briefly
describe funding of health care for retired teachers. |
Regardless
of the extent of your retirement system's involvement, please list
any general concerns you have about the issue. |
| Retirement
Systems of Alabama |
System administers
a comprehensive program for all active and retired school employees.
It sets rates, enrolls individuals, adopts plan design, collects
premiums, and contracts with claims administrator. |
Funded by monthly
employer and employee premiums.
Legislature includes funds for employer premiums in appropriations
to school systems. |
Cost of prescription
drugs generally. Specifically
concerned that prescription drug ads on TV increasing demand. Federal Medicare prescription drug program would be helpful. |
| Alaska
Teachers' Retirement System |
System administers
a comprehensive program. All
teachers who entered system before 7/1/90 (Tier 1) are eligible
for system-paid health coverage at retirement.
Those hired after June 30, 1990 (Tier 2) will receive:
1) at age 60, 50% of premium paid by system; and 2) at age
65, same coverage as Tier 1.
When retiree reaches age 65, Medicare becomes primary insurance. |
Part of actuarial
valuation, so program is pre-funded. |
Prescription drug
costs. Would like to
know whether Medicare prescription drug proposal would offset state's
cost. |
| Arizona
State Retirement System |
System administers
a comprehensive program that includes enrolling individuals, negotiating
contracts, and determining rates. All retirees are eligible for
program, including retired teachers. |
System-provided
portion of a retired member's premium is funded through employer
contributions. Retiree
pays remainder. |
Availability
is major problem. No
HMO coverage in rural areas, which increases costs. |
| Arkansas
Teacher Retirement System |
System deducts premium
amounts from retirees' check.
It also has authority to make a payment to all retirees to
help with health care costs.
This year's amount is $75/month. |
Existing funds. |
Cost. |
| California
State Teachers' Retirement System |
Beginning
in 2000, a portion of retirement system surplus is used to pay Medicare
Part A premium for retired teachers who did not establish eligibility
for such coverage. California
teachers are not covered by Social Security.
Affected individuals are those hired before April 1, 1986
and who did not establish eligibility for Medicare Part A through
coverage by a spouse or other Medicare-covered employment. |
See previous cell. |
Escalating cost |
| Public
Employees' Retirement Association of Colorado |
System administers
a comprehensive program that includes retired teachers. |
3 sources:
a portion of employer contribution; retirees' premium; and,
through gain sharing, a portion of actuarial surplus. |
Prescription
drug costs are skyrocketing.
Challenge to find carriers, especially in rural areas. |
| Connecticut
State Teachers' Retirement System |
System administers
a comprehensive program. |
3 sources:
active teachers contribute 1% of salary into health fund;
legislature makes general fund appropriation; and retirees pay a
premium. |
Amount in fund not
keeping pace with costs. |
| State
of Delaware Employees' Retirement System |
State, not system,
offers health care to retired employees, including teachers. System involved to extent that it deducts premiums from retirees'
checks and enrolls individuals. |
System
involved in pre-funding retiree health care to extent that if pension
employer rate is lower than 2%, difference goes into health care
fund. Legislature will
appropriate any amount not provided from fund. |
Important to monitor
issue. |
| Florida
Retirement System |
System offers health
insurance subsidy to all retirees (including teachers) who can show
evidence of health insurance coverage, whether through Medicare,
another government program, or a private carrier.
Subsidy paid directly to retiree. |
Legislature funds
subsidy on a pay as you go basis. |
No significant involvement
in issue. |
| Teachers'
Retirement System of Georgia |
System
deducts premium amounts from participating retirees' benefit checks
and forwards money to the state retiree health program. |
Two sources:
retiree premiums and a portion of employer health insurance
contributions paid on behalf of active members. |
Significant cost
increase in 2000, including prescription drugs. |
| Employee
Retirement System of Hawaii |
No involvement. |
NA |
Legislation may be
proposed to involve retirement system in health care. |
| Public
Employee Retirement System of Idaho |
No involvement, but
they are looking at the issue. (It does administer an accumulated
sick leave conversion program.) |
NA |
Need to make it easier
for individuals to save for retirement medical expenses while they
are still working. Some
tax-deferred vehicle that allows individual employees to save voluntarily
for such a purpose should be considered. |
| Illinois
Teachers' Retirement System |
System enrolls individuals,
deducts premiums from retirees' checks, and collects contribution
from active employee. It
does not negotiate the contract (done by Central Management Services
Program). |
Three sources:
active teachers contribute 1/2% of salary; state matches
amount; and annuitants pay premiums that are subsidized, amount
of subsidy depends on years of service. |
Program is financially
stressed making future changes likely.
Because system is enrolling agent, it receives calls and
letters from annuitants concerned about program even though it does
not decide benefits. |
| Indiana
State Teachers' Retirement Fund |
System sponsors a
program for retirees 65 and older.
It does not contribute to the cost, but it does decide the
benefits and contracts with a provider for the administration.
One-third of retirees participate. |
Participants fund
the plan through their premiums. |
High cost of prescription
drugs. |
| Iowa
Public Employees' Retirement System |
No
involvement. Some school
districts offer coverage to their retirees. |
NA |
Investigating how
to provide some assistance for state and local government retirees
to pay for health care costs. |
| Kansas
Public Employees' Retirement System |
No
involvement. Some school
districts offer coverage to their retirees. |
NA |
High
cost of prescription drugs. |
| Kentucky Teachers'
Retirement System |
Retired members of the Kentucky Teachers’ Retirement
System (KTRS) who are under age 65 and not Medicare Primary may
select from the available managed care plans (HMO’s, PPO’s, and
POS’s) that are offered through the Commonwealth of Kentucky’s State
Group Health Plan, administered by the Kentucky Department of Personnel,
and available to all public employees both active and retired who
reside in Kentucky. Retired
members residing out-of-state may receive premium reimbursement,
up to the dollar level of support that is provided in state, when
verification of coverage and expenditure documentation is provided
to KTRS. Retired members age 65 and over or Medicare Primary are
provided a Medicare supplemental plan which is self-insured by KTRS.
KTRS contracts with Aetna to process and pay claims and provide
limited administrative services.
Prescription drug coverage is also provided through a 30
day retail plan/90 day mail service plan with Merck/Medco. |
Funding for the KTRS medical insurance program
is currently provided by a 0.75% contribution of active member payroll,
a 4.0% employer contribution of active member payroll, and retired
member co-payments when their coverage selection exceeds the basic
KTRS support rate. Retired
members with twenty or more years service will receive $234.00 monthly
in plan year 2001 for the under age 65 group and $210 monthly for
the Medicare supplement/drug program.
$210.00 per month represents the total projected cost of
the Medicare supplement/drug program for plan year 2001. |
A. Recent experience
indicates a 9 – 11% average annual increase in Medicare supplement
plan claim experience. |
| B.
Drug spending annual increases that have averaged 17 – 24% over
past two years and no relief in sight. |
| C.
Average yearly 10% increases in the basic supplemental support provided
to retirees in under age 65 program. |
| D.
An increasingly older average aged active member population with
approximately 20% of active member population either eligible to
retire or will be eligible to retire within the next two years,
and consequently eligible for coverage through the KTRS plan. |
| Teachers'
Retirement System of Louisiana |
System withholds
premiums from retirement benefits if requested by the employer (as
opposed to the individual retiree, as in the case of other systems),
but does not have any other involvement.
State and school districts provide health care for retired
teachers. |
System is not involved
in funding. |
COLAs are sometimes
inadequate to cover cost in premium increases.
Premiums are rising even though coverage may be declining. |
| Maine
State Retirement Systems |
No involvement except
to deduct amount of premium and remit to appropriate insurance provider.
State offers coverage to retired state employees. |
System is not involved
in funding. |
Cost. |
| Maryland
State Retirement and Pension Systems |
No
involvement. Some school
districts offer coverage to their retirees. |
NA |
"Retiree health
care is the next policy debacle.
The issue is similar to the problem of underfunded public
pension systems of 20 years ago." |
| Massachusetts
Teachers' Retirement System |
System
collects premium and forwards it to insurance carrier:
1) state; or 2) former local employer of retiree. |
No involvement. |
A well-funded retirement
system will be pressured to use money for retiree health care. |
| Michigan
Public School Employees' Retirement System |
System administers
a comprehensive program. |
School districts
fund program. |
Concerned about long
term funding of benefits. Governor is proposing to actuarially fund,
in part, health care benefits for retired school employees in Michigan. |
| Minnesota
State Teachers' Retirement Association |
No involvement. Large
percentage of members work for employers who offer some level of
post-retirement coverage. |
NA |
Task force issued
report in January 2001 to legislature regarding coverage for all
public employees. |
| Public
Employees' Retirement System of Mississippi |
System administers
a Medicare supplement plan (available to those 65 and older). It will deduct premiums from monthly benefit checks. |
Retirees pay entire
amount. Legislation
proposed in which System will subsidize a portion of premium.
Proposed program would be pre-funded. |
Stable, affordable
program for public retirees needed. |
| The
Public School Retirement System of Missouri |
System has no involvement.
Retired teachers must be allowed to stay on school district
plan at same rate. |
NA |
Cost is expensive. |
| Montana
Teachers' Retirement System |
System deducts premium
from benefit checks and sends to individual's former employer or
insurance carrier. |
System is not involved
in funding. |
Increasing costs
and availability. Individuals
should be able to save for retiree health care on a tax-deferred
basis. |
| Nebraska
Public Retirement System |
System is not involved
in health care for retired teachers.
School districts are likewise not involved.
If a school district, however, is part of Nebraska State
Education Association (NSEA) group coverage, their retirees can
continue coverage in group and pay full cost.
NSEA group also offers Medicare supplemental coverage for
those 65 and over and a prescription drug option. |
System is not involved
in funding. Retirees
pay full amount. |
Cost. System is considering a benefit that would essentially supplement
cost of premiums for retirees. |
| Public
Employees' Retirement System of Nevada |
System deducts premiums
from retirees' checks, but has no other activity. |
System is not involved
in funding. |
Not involved in issue. |
| New
Hampshire Retirement System |
System pays a standard
subsidy rate for retired teachers' health care directly to school
districts. Subsidy
amount is usually less than premium. |
Payment funded by
excess earnings above actuarial assumed rate of return. |
Cost
is skyrocketing. Only
two carriers in state. |
| New
Jersey Division of Pensions and Benefits |
Division administers
a comprehensive program for active and retired employees of state
and 875 local employers. Program
includes retired teachers.
State provides full payment for retired teachers' premiums. |
Legislature funds
on a pay as you go basis.
Maintains a reserve as a cushion.
Until 1994 was reserve funded. |
Cost is escalating
faster than rate of inflation.
Drug costs are particularly high. |
| New
Mexico Educational Retirement Board |
System
withholds premiums from retirees' checks and sends them to Health
Care Authority. It
also sends lists of enrollees to Authority.
Retired teachers receive health care coverage from Authority
as do active employees and other retirees in New Mexico. |
System
is not involved in funding.
Active employees and employers contribute to Health Care
Authority, which is funded on a reserve basis.
Authority and retirees share cost of health care. |
Cost of health care,
especially prescription drugs, is increasing.
Prescription ads on TV increases demand. Need to ensure accessibility to medical care. |
| New
York State Teachers' Retirement System |
System withholds
premiums from retirees' checks and forwards them to wherever directed. |
System is not involved
in funding. |
Retiree health care
is very expensive. In
New York, there are approximately 850 individually-negotiated collectively
bargained agreements. Accordingly,
disparity exists in costs and benefits depending on where retired
teacher worked. |
| North
Carolina Teachers' and State Employees' Retirement System |
System enrolls retirees
and deducts premiums for dependents. Individuals with at least 5
years as a contributing member of System and who are retired are
eligible for health insurance at no cost under state health plan,
administered by Blue Cross/Blue Shield. |
Legislature makes
appropriations on a pay as you go basis. |
Need to ensure adequate
and stable retiree health care. |
| North
Dakota Retirement and Investment Office |
System withholds
premiums from benefit checks and remits them to state.
Retired teachers eligible to participate in state's retiree
health care program. |
Retirees pay entire
amount. Retirement
system is not currently involved in funding. |
Cost is rising, especially
prescription drugs. |
| State
Teachers' Retirement System of Ohio |
System administers
a comprehensive program. It
chooses insurance carrier, enrolls retirees, provides educational
materials, among other activities. |
Three sources:
4.5% employer contribution; retiree pays a premium, amount
of which depends on length of service; and investment earnings on
employer contribution. |
Cost, especially
prescription drugs. |
| Oklahoma
Teachers' Retirement System |
System pays a portion
of cost of health care premiums for retired teachers.
Payment known as a "supplement." It deducts remainder of premium cost from monthly benefit
check. Supplement is
currently $100 per month. |
Supplement paid from
Retiree Medical Benefits Fund established under IRC § 401(h).
System transfers money from pension reserve fund into medical
fund. Supplement
not pre-funded, but absorbed from pension reserve fund. |
Cost. Premiums go up July 1, 2001. |
| Oregon
Public Employees' Retirement System |
System administers
a comprehensive program to all retired members (including teachers).
It also offers a $60/month subsidy to retired members who
have at least 8 years of service, are enrolled in Medicare Parts
A and B, and enroll in a system-sponsored Medicare supplemental
health insurance plan. |
A retired teacher
pays all costs of program, except for $60/month subsidy, assuming
he/she is eligible for it. Some school districts, however, have
early retirement incentives that pay health care for those not yet
eligible for Medicare. These
programs vary and are independent of system. |
Rising costs.
System has had significant success in keeping increases below
average, but that situation won't last indefinitely.
As costs rise, system is faced with conflict between providing
"affordable" health care and offering a comprehensive
plan. Because system's
program serves primarily Medicare-enrolled members, Medicare policies
have effect. In addition,
while system recognizes issues surrounding "Patients' Bill
of Rights," it has concerns about ability of managed care to
continue to be a cost-effective choice for senior citizens.
System has been very successful offering managed care options
to retirees, allowing them to save millions of dollars in out-of-pocket
premiums. Retirees
are well served by having those choices available. |
| Pennsylvania
Public School Employees' Retirement System |
System
administers a comprehensive program that includes indemnity and
managed care programs. It
also includes an uncapped prescription drug benefit.
Open enrollment occurs each year. |
State and school
district split cost of premium assistance for eligible retirees;
retirees pay balance. Assistance
is up to $55/month. |
Prescription drug
costs are now one-half of total cost of program.
Interested in knowing how federal changes in health care
policy will affect program for Pennsylvania retired teachers. |
| Employees'
Retirement System of Rhode Island |
System enrolls retirees,
answers questions, and deducts premium from retirement checks.
Department of Administration negotiates contract and vendors
provide remainder of services. |
Retirees pay entire
amount. Legislation
proposed in which System will subsidize a portion of premium.
Proposed program would be pre-funded. |
Prescription drug
costs are very high. |
| South
Carolina Retirement System |
System withholds
premiums from benefit checks and remits them to Office of Insurance
Services (OIS). Program
offered through OIS and is available to qualifying retirees. |
Each employer assessed
pro rata cost, which is paid toward premium.
Retiree pays remainder. |
Cost very high; hospice
coverage should be routinely covered; broader availability should
be achieved; pre-funded long term care needed. |
| South
Dakota Retirement System |
No involvement. |
NA |
NA |
| Tennessee
Consolidated Retirement System |
System deduct premiums
from benefit checks at request of retiree. |
State pays a portion
of premium for a retired teacher in a participating school district. |
Rising cost of prescription
drugs and concern that Medicare does not cover that expense. |
| Teacher
Retirement System of Texas |
System
administers a comprehensive plan. |
Four sources:
retirees pay premiums for optional coverage; active employees
contribute; state makes a general appropriation; and health care
trust's earnings, to extent it has income, is used. |
Although plan design
is excellent, financial condition of trust will not be able to sustain
payment after fiscal year 2001 without a legislative solution.
Any change in Medicare would affect plan. |
| Utah
Retirement System |
System administers
a program for those 65 and older that supplements Medicare. It enrolls individuals and negotiates contract with provider.
Pre-age 65 individuals receive coverage from school district. |
Retirees pay entire
amount. Legislation
proposed in which System will subsidize a portion of premium.
Proposed program would be pre-funded. |
Concern about federal
government adding a prescription drug feature to Medicare. |
| Vermont
State Teachers' Retirement System |
System administers
a comprehensive program with three different plans for retirees
who are both under 65 and those 65 and older.
It is available to anyone drawing a pension.
Enrollment is open each year. |
System
pays one-half of retiree's premium and retiree responsible for other
half. |
Although program
is flexible and useful for retirees, it is very expensive. |
| Virginia
Retirement System |
System pays a health
credit to retired teachers based on years of service.
Anyone with 15 years or more of service receives $2.50 per
year which is paid each month (e.g., retired teacher with 30 years
of service receives a $75 credit per month). |
State pays 100% of
health credit cost on pay as you go basis. |
Health care costs
grow faster than credit can be adjusted. |
| Washington
State Department of Retirement Systems |
Department deducts
premium from benefit check upon retiree's request.
It mails educational materials prepared by Health Care Authority
along with other publications to individuals wishing information
about retirement. |
Department is not
involved in funding. |
Cost. |
| West
Virginia Consolidated Public Retirement Board |
System
does not administer a program but it will deduct premium from benefit
check, upon retiree's request, and pay amount to insurance carrier
or his/her former school district. |
System is not involved
in funding. |
Medicare program
should include prescription drugs.
Cost -- no way to control.
Concerned about mandate from legislature that will attempt
to use pension money for health care. |
| Wisconsin
Retirement System |
System
offers a local government health insurance pool that fewer than
10 school districts have joined.
It also administers an accumulated sick leave conversion
credit program for state and university employees.
School districts often provide some years of coverage for
teachers with teachers' paying 10% or so of premium and eligibility
conditioned on insurer's willingness to cover retirees. |
Local
government health insurance pool is funded by employers and employees/retirees.
Employer must pay 50% or more of premium for all active employees
to join. In actuality,
most employers pay 90%. Once
an individual retires, he/she can remain in plan as long as employer
continues to participate for active employees, but no requirement
exists for employer to pay any specific share of premium. |
Cost. |
| Wyoming
Retirement System |
System does not administer
a program but it will deduct premium from benefit check, upon retiree's
request, and pay amount to insurance carrier or his/her former school
district. Some retired
teachers receive coverage from former school district; others receive
it from other sources. |
System is not involved
in funding. |
Cost -- no way to
control. Concerned
about mandate from legislature that will attempt to use pension
money for health care. |
