Materials linked from the March 17, 2014 Faculty Economic Welfare & Retirement Committee minutes. Optional Retirement Plan; Long Term Care; Affordable Care Act ‐Notes sent from Donna Chastain, 3.17.14 ORP Rates ORP rates for the ORP Tier 1, 2, and 3, by law are tied to the employer rates the University System pays for PERS Tier 1, Tier 2, and the OPSRP. Every 2 years, PERS has an actuarial study completed that reviews/determines what the employer rate should be in order to be able to fund the retirement liability for current and future PERS retirees in each of the Tiers/programs. OUS then sets the ORP rates for the upcoming 2‐year period based on the rates they have been given by PERS. For the 2013‐2105 year period, OUS posted the below rates, which was prior to the end of the last legislative session. The rates were based on the PERS rates they had been given at the time. OUS did place an asterisk “*” at the end of the row, which as after the 6%. OUS should have placed it at after the “2013‐2015” to make it clearer. See below chart. After PERS and OUS set the initial rates for the 2013‐2015, two PERS bills were passed late in the legislative session which required PERS to recalculate the rates and to immediately take into account the savings that would be produced from the changes that were passed in the bills. The savings were created by the following bills: SB 822 – reduction in the cost of living for retirees and eliminated the “out of state” tax remedy for retirees that move out of the state of Oregon SB 861 – further reduced the cost of living increases for retirees SB862 – prevents spiking of average ending salary in last three years of employment Savings were also created by the reduction to the Assumed Rate from 8% to 7.75% which was passed by the PERS Board and the reduction to the AEF as a result (AEF = Actuarial Equivalency Factors). Because the PERS Board was required, by law, to take into account the savings created by the bills passed, PERS went back and recalculated the rates for the 2013‐2015 time period. Once that was done, OUS then had to change the ORP rates that were originally posted. Remember, the ORP rates by law are ties to the PERS rates. Thus, the ORP rate for Tier 1 & Tier 2 changed from an anticipated 20.9% contribution to 16.5% contribution. The rates for the ORP Tier 3 were not impacted because the changes that resulted in savings impacted Tier 1/Tier 2 employees only…it did not impact the PERS OPSRP program. A summary of the legislative changes can be found on our website at: http://hr.oregonstate.edu/benefits/pension‐retirement‐savings/public‐
employees%E2%80%99‐retirement‐system‐pers‐updates RATE information posted by OUS based on initial PERS rates published. Rates changed based on legislation that was passed. The legislature required PERS to go back and recalculate rates taking into account savings that were generated. Long‐term Care Insurance The Public Employee Benefits Board (PEBB) is the State Agency that oversees the benefits that are offered to State and University employees. The Long‐term care policy that is offered is issued by UNUM. The policy offered provides a “guaranteed” issue amount for employees if they enroll in the coverage as a new hire (within the first 30 days) or when the policy first became available (late 1990s). If an employee didn’t enroll when first eligible and later decides to enroll, the employee must complete a health history statement. UNUM reviews the health history statement to determine if they will underwrite/issue the policy. If an employee has a condition that UNUM does not want to cover, they do not issue the policy. This is a common practice in the insurance industry (i.e., life insurance…must complete health history, blood work, physical before policy is issued). We inform employees of the guaranteed issue at the New Employee orientations and through our New employee Orientation website (excerpt below). Information is also available on the PERS website below. Long‐term care information: http://www.oregon.gov/DAS/PEBB/pages/opben/ltc.aspx Long‐term care health history application is attached. This is the same form UNUM uses for the PERS Health Insurance LTC policy that is available for PERS retirees. New Employee Orientation website – Optional Benefits. http://hr.oregonstate.edu/orientation/benefits‐overview/unclassified‐50‐10‐fte‐
benefits/benefits‐overview#optional‐benefits Long Term Care – Plans available for employee and eligible family members. You can enroll at any time during the year. Medical history statement and approval of provider is required. There is a guarantee issue policy for the employee if enrolled within 30 days of hire, coverage level of up to $4,000/month benefit with a duration of 3 to 6 years (no medical history statement is required for the guaranteed issue amounts). Affordable Care Act – National Health Care The Affordable Care Act places additional requirements on employers. It requires an employer to provide health insurance for all “Full‐time” employee (defined as 30 hours per week or more) and to monitor those hours in a “look back” period which then guarantees health insurance for a period of time (the Stability period). Although, OSU currently provides coverage for employees that work 20 hours or more per week, this new requirement still has implications that will impact OSU. For example, if an employee goes into LWOP or reduces their FTE during the Stability Period, we will still be required to pay for their health insurance as long as they are not terminated.