State Health Benefit Plan Special Report:
DCH Letter Clarifies that Some Retirees Previously Excluded
Now Qualify for Old Subsidy Policy
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Today, PAGE received a copy of a letter
(text below) from DCH addressing the SHBP Annuitant Years of Service Subsidy Policy. You can view and download a copy of the letter
HERE. We are appreciative that DCH has addressed many of the issues of concern expressed by PAGE on behalf of our members and will continue to work with the commissioners on those that have not been addressed.
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Communication from DCH to SHBP Members
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Subject: SHBP Annuitant Subsidy Update February 8, 2017
Good Evening,
The attached letter, which is also contained in the body of this email, clarifies that it is no longer necessary for members who were Active Employees with at least five (5) years of service in a State retirement system on January 1, 2012 to have been enrolled in SHBP on January 1, 2012 to fall under the Annuitant Basic Subsidy Policy (Old Policy). This means that your Active Employees with at least five (5) years of service in a State retirement system on January 1, 2012 are subject to the Old Policy, and therefore will not be subject to the Annuitant Years of Service Subsidy Policy (New Policy). Refunds have been processed for Retirees who were incorrectly charged and we have reached out to each of them individually. We believe this will answer many of the questions that members have; however, if after reading the letter, members have further questions, please feel free to have members email those questions to [email protected] and a member of our Benefits Administration Team will respond to them within 24 - 48 hours, excluding weekends.
Additionally, we are coordinating with ADP to update their systems and information available to the Member Services representatives regarding this change; please allow up to a week for this to occur.
If members receive conflicting information, please ask them to email us at [email protected].
Please note if members previously received a letter from SHBP regarding the Annuitant Subsidy dated December 2016, they may also receive the letter below via mail.
Thanks,
State Health Benefit Plan
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February 2017
Dear Valued SHBP Member,
Last month, the State Health Benefit Plan (SHBP) provided notice that SHBP was implementing the new methodology that was passed by the Board of Community Health in December 2011 for applying subsidies that may directly impact your cost of health coverage. The old methodology is known as the Annuitant Basic Subsidy Policy (Old Policy) and the new methodology is the Annuitant Years of Service Subsidy Policy (New Policy). This letter is intended to help clarify which Policy individuals will fall under. Specifically, we would like to clarify that, as outlined more fully below, it is no longer necessary for members who were Active Employees with five (5) years of service in a State retirement system on January 1, 2012 to have also been enrolled in SHBP on January 1, 2012 to fall under the Old Policy.
Annuitant Basic Subsidy Policy (Old Policy)
The Old Policy applies to the following members:
- Members who were enrolled in SHBP coverage as Annuitants on January 1, 2012;
- Members who were Active Employees with at least five (5) years of service in a State retirement system on January 1, 2012; and
- Members who were enrolled in SHBP coverage as Former Employees on January 1, 2012. (Former Employees are individuals who have a minimum of eight (8) years of service and are entitled to State Extended Coverage.)
For members who fall under the Old Policy, their dependents will also fall under the Old Policy.
Annuitant Years of Service Subsidy Policy (New Policy)
Members who do not fall under the Old Policy will fall under the New Policy. Members' rates under the New Policy will be based on their years of service, which will be provided by the State retirement system. (1) The New Policy's methodology remains the same as provided in the December 2016 letter and is applied as follows:
- The subsidy percentage for each member increases with every year of service beginning at 10 years through 30 or more years. Members with 0-9 years of service (i.e., less than 10 years of service) will receive no subsidy.
- For members, the subsidy range is a minimum of 15% for 10 years of service (i.e., 10 years of service = 15% subsidy), and a maximum of 75% for 30 or more years of service (i.e., 30 or more years of service = 75%; and cannot be greater than the subsidy for Active Employee).
- The subsidy amount for each dependent increases with every year of service for the member beginning at 10 years through 30 or more years.
- For dependents, the subsidy range is a minimum of 15% for a dependent if the member has 10 years of service and a maximum of 55% if the member has 30 or more years of service (but cannot be greater than the subsidy for an Active Employee's dependent minus 20%).
An Annuitant Years of Service Subsidy Policy Review Process (Review Process) will be available to Annuitants. Since SHBP does not know if members will retire from a State retirement system until a member retires nor does SHBP have access to members' years of service prior to a member's retirement, the Review Process will only be available at the time of retirement.
Additional Information
The SHBP rate calculator is available on our website for the purposes of estimating a member's rate under the New Policy for coverage during the 2017 Plan Year. (2)
For questions regarding the New Policy, please contact the SHBP Member Services Center at 800.610.1863 or via email at [email protected].
Sincerely,
Frank W. Berry
Commissioner
1 SHBP does not calculate or determine members' years of service. This information will be made available to SHBP from the State retirement system(s) upon a member's actual retirement from their applicable State retirement system. Therefore, prior to retirement, SHBP is unable to provide a member their total years of service as of 1/1/2012.
2 The rate calculator provides an estimate of the most common rate scenarios, but does not include every possible combination, especially in the cases of split rates.
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