OAR 459-035-0050: Contribution Payment From Retiree Health Insurance Premium Account for Eligible Retired State Employees Not Eligible for Medicare

This rule establishes the procedure for determining the amount of contribution that will be paid from the Retiree Health Insurance Premium Account (RHIPA)(ORS 238.415) on behalf of an eligible retired state employee under age 65, as described in OAR 459-035-0040, who is enrolled in a health insurance plan sponsored by PERS. (1) On or before November 1 of each calendar year, staff shall determine the monthly amount available to be paid from the RHIPA on behalf of an eligible retired state employee enrolled in a PERS health insurance plan contracted for under ORS 238.410. In determining the average difference between the health insurance premiums paid by retired state employees under contracts entered into by the Public Employees Retirement Board and the health insurance premiums paid by state employees who are not retired under contracts entered into by PEBB (without regard to employees who have opted out of PEBB-sponsored health insurance coverage), the staff shall calculate the change in value of the average of active PEBB plans after adjusting for the demographic (age/sex) differences between: (a) The active employee participants; and (b) Retired members receiving a subsidy and participating in one of the PERS non-Medicare health insurance plans as follows: (A) Obtain the average employee participation for each health insurance plan sponsored by PEBB for the most recent three-month period; (B) Obtain the health insurance premium for each health insurance plan sponsored by PEBB for the plan year next following; (C) Obtain the average eligible retired state employee participation for each health insurance plan sponsored by PERS for the most recent three-month period; (D) Compute the average health insurance premium for all plans sponsored by PEBB pursuant to the following formula: (i) Step 1. Multiply the average participation in paragraph (A) of this subsection by the health insurance premium in paragraph (B) of this subsection for each plan; (ii) Step 2. Total the average participation for all plans; (iii) Step 3. Total the result for all of the calculations in Step 1 of sub-paragraph (i) of this paragraph; and (iv) Step 4. Divide the total in Step 3 of sub-paragraph (iii) of this paragraph by the total in Step 2 of sub-paragraph (ii) of this paragraph. (E) Compute the change in value of the average active PEBB plan pursuant to the following formula: (i) Step 1. Divide the total in paragraph (C) of this subsection by the total in Step 2 of paragraph (D) of this subsection; (ii) Step 2. Multiply the average participation for each plan in paragraph (A) of this subsection by the result of Step 1 of sub-paragraph (i) of this paragraph for each plan; (iii) Step 3. Multiply the premium for each plan in paragraph (B) of this subsection by the estimated factor of non-Medicare retiree claims cost to active claims cost; (iv) Step 4. Multiply the result of Step 2 of sub-paragraph (ii) of this paragraph by the result of Step 3 of subparagraph (iii) of this paragraph for each plan; (v) Step 5. Total the results for all of the calculations in Step 4 of sub-paragraph (iv) of this paragraph; (vi) Step 6. Total the results of the average participation calculations for all plans in Step 2 of sub-paragraph (ii) of this paragraph; and (vii) Step 7. Divide the total premium in Step 5 of sub-paragraph (v) of this paragraph by total average participation as calculated in Step 6 of sub-paragraph (vi) of this paragraph. (F) The result of Step 7 of sub-paragraph (E)(vii) of this subsection minus Step 4 of sub-paragraph (D)(iv) of this subsection is the maximum monthly amount available to be paid by PERS on behalf of an eligible retired state employee. Under no circumstances will this amount be less than $0. (G) The maximum monthly amount paid by PERS on behalf of an eligible retired state employee shall be determined using qualifying service. (2) The factor in Step 3 of sub-paragraph (1)(b)(E)(iii) of this rule shall be evaluated no less frequently than every three years. (3) The monthly amount available established under section (1) of this rule shall be published by November 1 of each calendar year, or as soon as possible thereafter, and shall be effective for the plan year next following for PERS sponsored plans. (4) In the event an active plan is not to be renewed for a subsequent plan year, the participants shall be deemed to be covered by another existing plan most similar in benefits. (5) This rule applies to the amount to be paid by PERS for the plan year 1993 and subsequent plan years. (6) No person eligible for a contribution from the RHIPA as provided for in this rule shall be entitled to a contribution from the RHIA.