1. 1 Retirement Board Meeting May 11, 2011 Retiree Benefits Briefing & Overview Presented by the Peralta District Benefits Office

2. 2 Agenda 1. Current Post Employment Benefits for Peralta Retirees-”What do our retirees get”? 1. Medical Insurance 2. Reimbursement of Medicare Premiums 3. Life Insurance 2. Review of our population 1. Review of census 2. Participation distribution 3. Medicare Coordination & Outreach efforts 3. Federal Subsidy Programs 1. Medicare D- Medicare Drug Reimbursement Program of 2005 2. ERRP- Early Retiree Reinsurance Program (2010) Two handouts: Annual Open Enrollment Announcement Sept 2010 Medicare Reimbursement Form

3. 3 Current Other Post Employment Benefits (OPEB) Medical ($147m = Actuarial Accrued Liability for current retirees only, per most recent study performed by Bartels & Associates) Medical ($147m = Actuarial Accrued Liability for current retirees only, per most recent study performed by Bartels & Associates) Refer to the “Peralta Benefits – Everyone” ed. Sept 2010, pages 19-21: Refer to the “Peralta Benefits – Everyone” ed. Sept 2010, pages 19-21: Pre 2004, benefits continue for the lifetime of the retiree Pre 2004, benefits continue for the lifetime of the retiree Post 2004, benefits continue to age 65 Post 2004, benefits continue to age 65 Payment arrangements for surviving spouses Payment arrangements for surviving spouses We do not pay for surviving spouses of retirees We do not pay for surviving spouses of retirees We bill Kaiser survivors through Benefits Dynamics We bill Kaiser survivors through Benefits Dynamics CoreSource bills survivors directly CoreSource bills survivors directly We do not pay for dental insurance unless the retiree and/or dependent is enrolled in the Kaiser Senior Advantage Plan We do not pay for dental insurance unless the retiree and/or dependent is enrolled in the Kaiser Senior Advantage Plan We pro-actively cull records through an interactive data base We pro-actively cull records through an interactive data base Reimbursement of Medicare Premiums ($1m) Reimbursement of Medicare Premiums ($1m) We reimburse retirees based on premiums they pay and as calculated by the Center for Medicare and Medicaid Services (CMS) We reimburse retirees based on premiums they pay and as calculated by the Center for Medicare and Medicaid Services (CMS) Reimbursements are income sensitive; not the same for everyone Reimbursements are income sensitive; not the same for everyone Life Insurance Life Insurance Continues to age 66 Continues to age 66 Runs about $2000/month; $24k/year Runs about $2000/month; $24k/year

4. 4 Enrollment Distribution of our Retirees E3 E3

5. 5 Medicare Census, Costs & Savings E6 E6 Special Note: 1. 343 on CoreSource; 72 not coordinated with Medicare; We saved $1.8m in this fiscal year to Medicare coordination 2. 247 on Kaiser; 49 not coordinated with Medicare; they cost us an additional $300,000 in higher annual premium costs About 20% of our retirees may not be coordinating with Medicare-see how much we save when they do! From Bartels From Coresource

6. 6 1991 - 1994 1991 1991

7. 7 1994 - 1997

8. 8 1997 - 2000

9. 9 2000 - 2003

10. 10 July 1 2004 forward

11. 11 Pre 2004 hires

12. 12 Post 2004 hires

13. 13 Summary of transition 1991 - 2004 “Those retirees who are eligible for Medicare Part A coverage at age 65 shall apply for such coverage so long as there is no additional cost to the retiree… “Those retirees who are eligible for Medicare Part A coverage at age 65 shall apply for such coverage so long as there is no additional cost to the retiree… Retirees eligible for Medicare B are not required to enroll in that program so long as it requires payment.” Retirees eligible for Medicare B are not required to enroll in that program so long as it requires payment.” 2004 – present Faculty members hired before July 1, 2004, 3.c Faculty members hired before July 1, 2004, 3.c “ When such employees reach the age of Medicare eligibility (currently age 65) they shall enroll in Medicare Parts A and B, provided the District pays 100% of the current and future costs of Medicare premiums. The District shall pay or reimburse the retiree for the current and future costs of the Medicare premiums.

14. 14 Outreach efforts Annual meetings/luncheon with Kaiser and Medicare representatives to deliver on-site enrollment Annual meetings/luncheon with Kaiser and Medicare representatives to deliver on-site enrollment Telephone banks Telephone banks Personal mailings Personal mailings Options to control costs Options to control costs Discontinue Kaiser Traditional Plan for Medicare-eligibles, only offer them Kaiser Senior Advantage…(or Kaiser Out of Area plan or CoreSource) Discontinue Kaiser Traditional Plan for Medicare-eligibles, only offer them Kaiser Senior Advantage…(or Kaiser Out of Area plan or CoreSource) Send letter to inform all retirees of District commitment to provide lifetime benefits under the current plans available to them Send letter to inform all retirees of District commitment to provide lifetime benefits under the current plans available to them

15. 15 Medicare Drug Subsidy Program What is the subsidy What is the subsidy We receive a subsidy for those retirees over 65 and on our self-funded rx plan currently with Caremark. We receive a subsidy for those retirees over 65 and on our self-funded rx plan currently with Caremark. We receive a discounted premium for those retirees on our Kaiser senior advantage plan. We receive a discounted premium for those retirees on our Kaiser senior advantage plan. How much have we received? How much have we received?

16. 16 Early Retiree Reinsurance Program The Early Retiree Affordable Care Act provides The Early Retiree Affordable Care Act provides $5 billion in financial assistance to employers, unions and state and local governments to $5 billion in financial assistance to employers, unions and state and local governments to help group plans maintain coverage help group plans maintain coverage for early retirees age 55 and older for early retirees age 55 and older who are not yet eligible for Medicare who are not yet eligible for Medicare Peralta’s applications were approved in Fall 2010 (Separate applications were required for CoreSource and Kaiser) Peralta’s applications were approved in Fall 2010 (Separate applications were required for CoreSource and Kaiser) Must maintain a wellness campaign for our early retirees as a condition of participating in the program Must maintain a wellness campaign for our early retirees as a condition of participating in the program Showed them the 2010 wellness calendar Showed them the 2010 wellness calendar Vendor websites Vendor websites Benefits fair activities Benefits fair activities We will design a more comprehensive approach in the fall We will design a more comprehensive approach in the fall Subsidy monies due Peralta are pending- Subsidy monies due Peralta are pending- If useage patterns continue, we project about $400k/year in subsidy If useage patterns continue, we project about $400k/year in subsidy However, once the pool of $5b is gone, it is gone However, once the pool of $5b is gone, it is gone We are competing with private entities and other municipalities We are competing with private entities and other municipalities

17. 17 Other Questions