HRA Spring Newsletter: CARES Act expanding eligible OTC expenses
The CARES Act, signed into law in March, allows payment or pre-tax reimbursement from a reimbursement account for some over-the-counter (OTC) drugs, medicines, and products not prescribed by a physician after December 31, 2019. Please read the HRA Spring Newsletter from VIA Benefits for more information.
Retiree Health Reimbursement Account
Via Benefits, formerly OneExchange
The NC Conference has worked to balance concerns about the rising health care costs for retirees, the impact on apportionments to congregations, the high unfunded liabilities of the current insurance plan and the sustainability of retiree health benefits for both our current and future retirees. Retirees now have the ability to choose from a wide selection of Medicare supplemental plans with advice and guidance from Via Benefits, formerly OneExchange.
This new arrangement provides eligible participants with a conference-funded health reimbursement account (HRA) that helps offset the cost of an individual Medicare supplemental plan. Via Benefits can be reached at 855-801-9759.
Refer to these resources for more information:
- Via Benefits website for NCCUMC
- Reimbursement Request Form
- Recurring Premium Reimbursement Request Form
- Recurring Medicare Part B Reimbursement Request Form
- Direct Deposit Authorization Form
Board of Pension Develops Plan for 2014 Retiree Health Implementation
The NC Conference Board of Pension met on Tuesday, July 23, 2013 to consider the implications of an amendment to the Insurance Committee report at the 2013 Annual Conference regarding the amount of funding available for retiree insurance. The amendment to the report was to add the following language to Section V.D. of the report:
“The total amount of funds available for reimbursement of health care expenses through Health Reimbursement Accounts in 2014 shall be no less than the amount approved by the 2012 Annual Conference to be spent by the Board of Pensions for the retired clergy health insurance program in 2014.”
The board considered the amount of the budget, the anticipated receipt rate for that budget line, and the costs that must also be paid from that budget line and ended up with a maximum benefit to be paid to health reimbursement accounts of $3,600 for retirees and spouses receiving the maximum level of benefit. Those at that level would be those who retired prior to January 1, 2004 with full benefits and those who retired with 40 or more years in pension credit (prior to July 1, 2009) or years in the active health plan (after July 1, 2009). The same scale of benefit applies as was previously used so the contribution allocation then becomes as follows:
| Years of NC Pension Credit/ Years in NC Insurance Plan |
HRA Funding Percentage |
HRA Funding Amount |
| None at this level; all share in some costs |
100% | $4,000 |
| 40 or more | 90% | $3,600 |
| 35-39 | 80% | $3,200 |
| 30-34 | 70% | $2,800 |
| 25-29 | 60% | $2,400 |
| 20-24 | 50% | $2,000 |
| 15-19 | 40% | $1,600 |
| 0-14 | 0% | $0 |
This HRA contribution of $3,600 compares to the amount of $2,000 for the maximum funding level as proposed to Annual Conference. The resulting expected postretirement benefit obligation at a maximum funding level of $3,600 is $31,481,595. The expected obligation as currently structured with the self-insured health insurance group plan is $67,859,155.
Implementation of the revised benefit levels required developing an expected budget for the benefits that would provide for some of the other costs of the retiree benefits so that the remainder could be determined and then split up amongst the retiree accounts. The budget that was developed allows for continuation of retirees under age 65 on the conference active health plan as they currently are because they do not yet qualify for Medicare. The budget approved by the Board of Pension for retiree benefits is as follows:
| 2014 Conference Claimants Budget Line | $2,700,000 | |
| Estimated Collection Rate | 92% | |
| Estimated Receipts | $2,484,000 | |
| Premium Rates | ||
| -Under age 65 on active plan | $240,000 | |
| -Special Agreements (<65) | $60,000 | |
| HRA Funding | $1,835,000 | |
| Catastrophic HRA Reserve | $168,000 | $25/person/month |
| HRA Administration (EH) | $20,200 | $3/person/month |
| Wellness Benefits | $90,000 | 200 persons/plan |
| Life Insurance Premiums | $13,200 | |
| Conference Administration | $57,600 | 2.5% premiums + HRA |
| $2,484,000 |
There are currently approximately 510 retirees and dependents on the conference retiree over 65 health plan. The removal of some eligibility requirements in the Board’s report to annual conference will also allow for some participants who may have opted out of the self-insured plan to come back and receive retirement benefit funding. The Board estimated that to be approximately 10% of the current population, or another 50 participants.
The primary difference between this plan for implementation and what was proposed at annual conference is the amount of funding for the maximum benefit in the HRA. The funding level proposed anticipated having some funding remaining after HRAs were funded and other plan expenses paid to set aside against the unfunded benefit liability. In using all of the amount in the budget for current costs as planned as the amendment is implemented, no funding is set aside for future benefits. The cost that will be accrued for service year costs for active clergy in 2014 is $493,857. This is the amount that was planned in the proposal to be set aside for future benefits in order to pay for benefits as they are accrued. The amendment will use all of the budget for current costs and set aside nothing for the service being accrued in 2014.