Board of Trustees News

COBRA premiums now qualify for stipend use; open HRA for pre-Medicare set for 2020

At its April meeting, the OP&F Board of Trustees responded to suggestions from members by formally approving two changes to the retiree health care plan. The stipend available to eligible retirees can now be used for health care coverage through COBRA and, beginning with the 2020 plan year, the stipend is no longer limited to plans within the Aon Retiree Health Exchange for pre-Medicare retirees.

The COBRA change means that members who elect COBRA coverage from their employer at the time of retirement can use their stipend for those premiums. Members would be able to use the stipend for these costs until the next OP&F open enrollment or until the end of COBRA eligibility, whichever the member chooses. This change is effective immediately and for premiums paid after April 1, 2019. Pursuant to Internal Revenue Code, members may not use the stipend for a spouse’s COBRA premiums or a COBRA account through a spouse’s employer.

Once COBRA enrollment is verified, OP&F will work with Aon to fund the member’s Health Reimbursement Arrangement, which could take up to three weeks. Once the HRA is funded, members will receive a welcome kit and can begin submitting claims online or manually using a claim form, which must be submitted for reimbursement. If members believe they qualify for this plan, contact OP&F at 1-888-864-8363.

The ability to select plans outside the Aon exchange (referred to as an open Health Reimbursement Arrangement) would allow pre-Medicare retirees to select individual plans either through Aon or the open market beginning with the 2020 open enrollment period in November.

The plan available on the open marketplace must be compliant with the minimum coverage requirements set by Affordable Care Act. Plans available from an employer or a spouse’s employer are not eligible pursuant Internal Revenue Code.

PORTFOLIO UPDATE

OP&F’s investment portfolio value:
Current value (4/23/19): $15.7 billion
End of March value:     $15.6 billion
End of February value: $15.5 billion

Board of Trustees Committee Notes
(Motions voted on by the Board are listed separately)

  • GOVERNMENT AFFAIRS AND POLICY: The Committee heard updates on proposed language for Death Benefit Fund legislation and reviewed proposed changes to the disability process requiring legislative approval. A federal legislative report was provided that reviewed the proposed bill for Medicare at 55 for public safety officers and the removal of safe harbor protection for pharmaceutical rebates.
  • ADMINISTRATION/AUDIT: Staff provided the Committee the updates on projects in Business and Technology Solutions Department, the Internal Audit Status Report and the updated Internal Audit Plan.
  • BENEFITS: Staff presented the 1st Quarter 2019 Deferred Retirement Option Plan Experience Report for the Committee to review.
  • DISABILITY: The Committee reviewed the First Quarter 2019 Disability Experience Report in addition to the regularly scheduled hearings.
  • INVESTMENT: In addition to the monthly portfolio performance update, the Board received a presentation from private markets consultant TorreyCove on the state of that asset class. Also, real estate consultant, the Townsend Group, provided the real estate performance review for periods ended Dec. 31, 2018.
  • HEALTH CARE: A representative from Aon provided an update on the retiree health care and new changes to the plan and answered questions from trustees.


Motions:

At its April 2019 meeting, the OP&F Board of Trustees approved the following motions:

  • Approved staff’s and Wilshire’s investment manager rating recommendations for Bridgewater TIPS, Franklin Templeton, Loomis Sayles and Prima Capital Advisors. Motion passed by unanimous vote (Investment Committee).
  • Approved the Committee recommendations for the initial determination of disability for the members as identified in the initial determination hearings list presented to the Board on April 24, 2019. Motion passed a vote of 7-0 with one abstention, with the exception of members #4 and 5, which each passed 5-2 with one abstention (Disability Committee).
  • Approved the Committee recommendation for reconsideration for the members identified in the reconsideration hearings list. Motion passed 6-0 with one abstention (Disability Committee).
  • Approved the Committee recommendations for appeal hearings for the members identified in the appeals list presented to the Board on April 24, 2019. Motion passed 6-0 with one abstention (Disability Committee).
  • Approved the Committee recommendation for Death Fund benefits for the members identified. Motion passed by unanimous vote (Disability Committee).
  • Approved the Committee recommendation to waive mandatory medical evaluation and filing of annual earnings statements for future years for the members identified in the disability reporting waivers list presented to the Board on
  • April 24, 2019. Motion passed by unanimous vote (Disability Committee).
  • Approved an open HRA model for 2020 for pre-Medicare retirees who are stipend eligible as detailed in Aon’s presentation. Motion passed by unanimous vote (Health Care Committee).
  • Approved allowing pre-65 members to who elect COBRA for health care coverage to be eligible to receive the stipend pursuant to discussions at the March Board meeting, with the following guidelines: Pre-65 members enrolled in COBRA prior to April 1, 2019 will be eligible to receive a stipend effective April 1, 2019. Motion passed by unanimous vote (Health Care Committee).
  • Approved the Board Governance Policy Manual as presented on April 23, 2019. Motion passed by unanimous vote (Administration/Audit Committee).


    NEXT BOARD OF TRUSTEES MEETINGS: May 21-22, 2019

Posted 5/08/2019


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