Transcript Retiree Health Care Task Force Report and Recommendation

Retiree Health Care Task Force
Report and Recommendation
Elaine Phelps,
Benefits & Employee
Services
Retiree Health Care
Environment at UNM
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Approximately 600 early retirees with dependents are
covered on UNM medical plan.
Early retiree premiums mirror active employee contributions
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
Retiree medical claims cost far exceed those of active
employees
Governmental Accounting Standards Board (GASB)
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Requires postemployment benefits to be reported on financial
statements
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In 2007, liability was $92.3 million
By 2009, liability was $131.9 million
Task Force Charge
The Task Force was asked to:
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Consider alternatives for addressing rising health care costs
for UNM’s retiree population.
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Evaluate retiree health care eligibility criteria.

Analyze the ratio of premium to claims for early retirees.

Recommend health care options that more closely reflect the
cost of health care for the retiree population.
Process and Alternatives
Process

Faculty, staff, retiree, and administrative representatives
discussed and reviewed relevant information and options.
Alternatives

Healthcare Analytics provided cost projections for 14 options
in three categories.
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Benefit Eligibility
Premium Contributions
Policy Changes and Clarifications
Recommendations
Benefit Eligibility
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Establish new eligibility rules for individuals hired after
July 1, 2011.
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Age requirement of 60 years & 20 years of service or
65 years & 7 years of service
A ‘safe harbor’ will protect individuals who must retire early
due to a disability (as determined by the ERB).
Recommendations
Premium Contribution

Premium contributions will shift 5% effective July 1, 2011.
Typical contribution:
Employer Paid

Current Allocation
60%
40%
Fiscal Year 2012
55%
45%
Premiums will incrementally shift 1% per year for FY13-FY17.
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Retiree Paid
Premium shift is not associated with any potential increases
attributable to rising premium costs.
By FY 2017, a typical premium contribution will be 50/50.
Recommendations
Policy Changes and Clarifications

Effective July 1, 2016, employees must be enrolled in
UNM’s Medical Insurance five consecutive years
immediately preceding retirement.

Employees must enroll within 60 days from retirement and
maintain continuous coverage thereafter to remain eligible.