THIS MONTH’S HOT TOPICS

Elder Abuse Town Hall

There will be an Elder Abuse Town Hall on December 3, 2019 at the Tustin Senior Center.  Please click here for more information.  Please RSVP if you plan to attend.

Health Plan Open Enrollment

County of Orange Retiree annual Open Enrollment is from October 25 through November 15, 2019.

If you do not make changes to your current coverage, you will receive a Benefits Confirmation Statement after the end of Open Enrollment but will NOT be able to make any changes after the Open Enrollment period ends. A Benefits Confirmation Statement confirming your elections will be sent to you shortly after you have completed the enrollment process and have made changes in your coverage.  Below you will find helpful reminders:

You can either logon to the Benefits Center website at https://countyoforange.ielect.com or call a benefits specialist at 800-858-7266 between 5:00 am and 8:00 pm Monday through Friday, except holidays to ask questions or make your 2020 plan year elections. 

Again, if you make any change during Open Enrollment, you will receive a confirmation statement in the mail that will allow you 10 business days from the date on your confirmation statement to make any changes.  If you decide not to make any change you will also receive a confirmation statement in early to mid-December.  It will document your 2020 plan year coverage with no opportunity to make changes. 

Please remember if you are not able to attend the few live Open Enrollment presentations, you can view it as  a pre-recorded webinar from any computer with internet access. Links are found on the Benefits Center website on the home page or on the Employee Benefits website at www.ocgov.com/gov/hr/eb, On the navigation bar, click on 2020 Rate & Open Enrollment (no passwords are required).

Frequently Asked Questions 2020 Premium

Rates for County Retiree Health Plans

What Causes Health Plan Rates to Increase or Decrease So Much from Year to Year?

2020 Retiree Health Plan rate changes very significantly from a 20% decrease in the Non-Medicare Wellwise PPO plan to a 25% increase in the Wellwise PPO Medicare plan and various increases and decreases by plan and tier in the other plans. This FAQ was created to answer some basic questions about how rates are calculated and why they might fluctuate so much from year to year. For information specific to what influenced the rates for each specific plan you can review the Agenda Staff Report (ASR) which is filed with the County Board of Supervisors when they approve the annual rates. To see a copy of that detailed document and the attachments, please click here and select the Open Enrollment information page.

How Claims Experience Is Used in Setting Future Rates

The actual premium rate to be charged for coverage in each plan is determined by reviewing prior-year medical and prescription claims data then adjusting it for future projected increases in medical and pharmacy claims as well as expected Medicare reimbursement for retirees enrolled in Medicare. 

To be specific, rates are determined each spring for the upcoming plan year beginning January 1st.  For example, setting rates for 2020 starts in the spring of 2019 by looking at claims experience for the 12-month period from May 2018 through April 2019. Then the expected claims for 2020 are projected by adding increases in medical and prescription costs likely to occur over the next 20 months (May 2019 through December 2020). The total amount of expected 2020 claims, along with administration and other fees necessary to operate the plan, less any offsets for pharmacy rebates or projected Medicare reimbursements is then divided by the projected number of covered retirees in the plan to determine the monthly per retiree rate. 

Other Factors Impacting Health Plan Rates

Health plans with a small number of people enrolled can have rate changes that vary widely from year to year since there are fewer covered people to spread the projected plans costs over. If there is a year with a large increase or decrease in claims experience, the impact to the per person rate can change significantly in one year because there are only a small number of people enrolled to cover those projected increases or decreases.  

The Affordable Care Act has insurer and other fees that can add several percentage points to the premium increase. For 2019 there were no ACA fees in the insured plans. In 2020 those fees were reinstated by the government and had to be included in the 2020 health plan rate increases.  

The amount Medicare reimburses the plan in Medicare Advantage Plans is determined by the Center for Medicare and Medicaid Services and can fluctuate from year to year. This is an offset to projected costs and can therefore impact the remaining costs needed to be passed on through the new premiums. 

Why are Wellwise and Sharewell Rates for Retirees with Medicare Going Up So Much?

In the case of the 2020 health plan rates for the Wellwise and Sharewell Medicare Retiree PPO Plans, the medical and pharmacy claims of retirees age 65 and older increased more than 15% over the most recent 12 months of claims experience. In addition, claims cost in the latter part of 2018 exceeded what had been projected when the rates for 2019 were set. The utilization and claim cost across almost all service categories, e.g. catastrophic, inpatient hospital, physician/professional, and emergency room have been increasing significantly beginning in the second half of 2018 and continuing through 2019 for retirees age 65 or older.  This resulted in actual claims experience exceeding the 2018 rates by 25%.  The rate increase for 2020 must catch up with the higher than anticipated claims costs in the second half of 2018, the projected shortfall for 2019 and projected claims costs in 2020.

What is the County Doing to Try and Manage Health Plan Costs?

The Employee Benefits Program Management and Budget Team is constantly monitoring plan details and trends and looking for areas that may require change. Since pharmacy costs can represent up to 40% of total claims for some groups the County has made several changes to PPO pharmacy contracts over the last several years including re-negotiating discounts and pricing, to adding new programs and edits to ensure that the most appropriate and efficient drugs are being utilized thereby reducing unnecessary claims costs to the plan. Since 2017 the County has implemented changes that reduced future pharmacy costs by an estimated $4.5 Million (Employee and Retiree).    Effective January 2020, prescription administration for the Sharewell Retiree plan will be done by OptumRx, Inc. under its current contract.  Transitioning the Sharewell pharmacy claims administration to OptumRx, Inc., provides the plan with improved pharmacy management through robust pharmacy management programs and reporting and will create consistency with the self-funded Wellwise Retiree PPO health plan.  Under the OptumRx, Inc. contract, both populations, Wellwise and Sharewell Plans, will be subject to the same Formulary and Utilization Management programs.  This will generate savings of $79,000 in Sharewell prescription claims due to the Formulary and Utilization Management program and generate additional rebates of $746,000.  It will also generate a reduction in Wellwise prescription claims of $186,000 resulting from better pricing due to the increased number of covered lives.  These savings were used in the projection of future claims and were applied against annual pharmacy trend factors for 2020 rates.

Refer to the schedule in your Open Enrollment package for remaining Medicare retiree live presentations. 

Click here for the retiree PPO rates

Click here for the retiree HMO rates

When your contact information has changed

If you move, get a new or change your e-mail address or telephone or if you have a name change, there are actions that are necessary so that you continue to receive your benefits, newsletters, e-mails, etc.

If any of the above pertains to you, you need to notify REAOC, the Orange County Employees’ Retirement System (OCERS) and the County of Orange Employee Benefits Center with the new information.

To contact REAOC – call (714) 840-3995 or click here to e-mail with the new/changed information.

To contact OCERS – call (714) 558-6200 or click here to go to their website and sign-into “MyOCERS” to update your information.

To contact the County of Orange Employee Benefits Center – call (800) 858-7266 or click here to go to the benefits website.

REAOC Informer Newsletter

Click here to read the latest Informer newsletter.

NEWS WEEK OF NOVEMBER 4, 2019

Commentary – Pension costs hitting home – hard

A commentary by Dan Walters on the CALmatters web site talks about the strain that CalPERS pension costs is placing on local government budgets, and says “Cities and fire districts throughout the state are being hammered particularly hard by CalPERS’ extra levies for UAL because their “public safety” employees — police officers and firefighters — have California’s most generous pension benefits and therefore its highest employer cost.” (More)

Commentary – California’s pension debt cannot be ignored

Stanford Professor Joe Nation, known as a voice critical of the cost of public sector pensions, writes in this piece at the CALmatters web site that without action by legislative leaders “Public pension debt will continue to grow.  K-12 classroom funds and municipal services will continue to be cut. Legislative attempts at reform barely made a dent in the problem overall.  The question isn’t really the size of California’s pension debt over the next 10 years. It is whether California’s leaders have the courage today to acknowledge and implement the aggressive and comprehensive reforms that are so clearly required.” (More)

Opinion – pension funds should focus on improving funding ratios, not politics

The author is critical of decisions made, sometimes by mandate of the Governor and/or state legislature, to steer CalPERS and CalSTERS investment funds away from companies deemed by politicians as politically unacceptable.  Examples cited are private prison industry and companies involved with immigration. The piece closes by saying “Out of fairness to their members, but mostly as a commitment to their missions, public pension boards should avoid prioritizing political and social goals over maximizing returns and managing risk. Instead of focusing on enacting social change, public pension boards should concentrate on making sure they keep their promises to public servants by fully funding their retirement plans.” (More)

Irvine ranked safest US city

The Redlands Daily Facts carried an October 28 story by the Orange County Register that the Orange County city of Irvine was the top-ranked and was one of 10 Southern California cities to make the Top 50 ranking by the 24/7 Wall Street web site. Other California cities in the top 10 include Murrieta, Thousand Oaks and Glendale. Orange was 15 and Temecula 19. (More)

Column: Two rival experts agree — 401(k) plans haven’t helped you save enough for retirement

The Los Angeles Times ran this column that reported on the findings of two experts who commonly come at these questions about the impact of America’s shift from traditional pensions to 401(k)’s and other so-called defined contribution plans.  It reports that from their research an important new analysis of how 401(k) plans have been working – they reached agreement that the plans haven’t been working well enough to help workers save for retirement. (More)

Editorial – Obamacare fuels explosion of treatment homes in coastal areas (The law of unintended consequences at work) (Editor’s Note:  This headline is mine, not that of the newspaper editorial)

The Orange County Register reports that the federal Affordable Care Act – also known as Obamacare – required insurance companies to pay for addiction treatment, and at rates comparable to coverage for major illnesses. That meant “virtually anyone could get a policy” and high reimbursement costs turned addicts into “gold mines”. “Our region became the center of this industry because patients would rather spend their recovery time in warm, beach-adjacent areas than in Rust Belt cities.”  Thus, Orange County and three other Southern California counties are known as the Rehab Riviera because of their large number of addiction treatment facilities.  And, the impact the story reports, is to “disrupt neighborhoods, incidents of sexual assault, drug abuse, questionable payment schemes and even death.” (More)

ABOUT OUR LUNCHEONS

WHY
REAOC luncheons are held for the purpose of bringing Orange County retirees together for an afternoon of camaraderie, entertainment, and information. Friends and family are always welcome! Each luncheon features a different theme, with door prizes, and special gifts. As an added bonus, there is a valuable Progressive Drawing. They also serve as a general meeting for the membership.

WHERE

The  Mile Square Park Banquet Facility located at 10401 Warner Ave., Fountain Valley, California, 92708. For directions, call the Mile Square Banquet Facility at (714) 962-5541 or see map below showing where the  Facility is located. Please DO NOT call the Facility to make reservations. Reservations are made by sending in the reservation form in The Informer or by calling the REAOC office at (714) 840-3995.

WHEN

Luncheons are held the 4th Wednesday of January, March, May and September, and on the first Wednesday of December at Noon. To ensure a parking spot please arrive by 11 a.m.  Please carpool if possible as the parking lot at this facility can be quite busy.

Luncheons for 2019 are listed below:

Cost for the luncheon is $17.00 per person. A reservation form is provided in The Informer (on the current Luncheon page), in the “Forms” section of the REAOC web site or you may email the REAOC office of your request (reaoc@reaoc.org).

HEMET CHAPTER LUNCHEONS

Luncheons in Hemet have been traditionally held on the second Tuesday during the months of February, April, June, October and December.   Attendees arrive around 11:30 a.m. at the First Presbyterian Church in the Fellowship Hall located at 515 E. Kimball Avenue in Hemet and lunch is served between 11:45 and noontime. The cost is $9.50 per person.  The Hemet Chapter would like new members and encourages all REAOC members who live in the area or within driving distance to join them for the luncheons.

REAOC’s Hemet Chapter will hold its next luncheon on Tuesday, October 15th at 11:30 AM at the First Presbyterian Church in the Fellowship Hall located at 515 E.Kimball in Hemet. 

Luncheons for 2019 are listed below:

Below is a map showing the general location of the Mile Square Park Banquet Facility located at 10401 Warner Ave., Fountain Valley, California 92708.

If you need exact directions from your house you can go to MapQuest and click on “driving directions.”

HEALTH PLAN RATES FOR 2020

On July 16, 2019, the Board of Supervisors in their regular Board meeting passed agenda items 21 & 23 without any discussion on a 5-0 vote.  These agenda items were the approval of the Health Plan Rates for retirees for 2020. 

Please click on the links below for the charts provided by the County for the 2020 Health Plan rates:

Click here for the retiree PPO rates

Click here for the retiree HMO rates

HEALTH PLAN RATES FOR 2019

If you have any questions regarding your health plan, please contact the County’s Employee Benefits section at (800) 858-7266.

Please click on the links below for the charts provided by the County for the 2019 Health Plan rates:

2019 Sharewell and Wellwise Health Plan Rates 

2019 HMO and PPO Health Plan Rates

For information about the supplemental insurance including dental and vision coverage, please click on the link below. 

Supplemental Insurance Benefits