Submitted by Richard Williams, STRS representative to the Ohio Council of Higher Education Retirees (OCHER)
The good news from STRS at the May 22, 2018, OCHER meeting was that the STRS board has approved a $0 increase for all enrollees in the Aetna Medicare Advantage and Medical Mutual Basic health insurance plans. The cost of enrollment in the Aetna Medicare Plan will continue at $342 per month before the STRS subsidy. The subsidy is based on years of service. For Medicare enrollees with 30 or more years of service, STRS pays a subsidy of $215 per month so the retiree pays $127, which is the same as in 2018. Non-Medicare enrollees with Aetna Basic (not living in Ohio) or Medical Mutual Basic (Ohio residents only) will have a total cost of $957 per month. Again, STRS will subsidize this cost based on years of service. For benefit recipients with 30 or more years of service, STRS pays $558 with the benefit recipient paying $399 per month. The optional Vision and the Delta Dental plans will also continue at the same cost for the next two years.
Benefit recipients enrolled in Medicare Part B will continue to receive $29.90 per month to reimburse a portion of the Medicare Part B premium for 2019. The STRS board previously had reduced the reimbursement to $0 beginning in 2019 but approved extending the $29.90 subsidy for 2019 because of the favorable claim experience in 2018 and a 15.8 percent investment return. The one year extension will cost $31 million so there is no guarantee that the board will continue the Medicare Part B subsidy beyond 2019 if claim experience or investment returns are not as favorable.
There was no significant news on the pension front. The board’s primary issue is whether the investment portfolio (for both the pension fund and the health care fund) should be “de-risked”. On average higher risk leads to a higher return but with a greater chance of a large drop in value. The board is weighing the results of a statistical study of historical performance of different combinations of risky assets (stocks) and less risky assets (bonds mostly) to arrive at a decision sometime next year.
Pushback from retirees over the ending of the cost-of-living adjustment (COLA) is building, but there is still almost no likelihood that the board will reconsider for the next several years.
