June 2017

Highway Patrol Retirement System

Newsletter

Our office will be closed on:

Tuesday, July 4 (Independence Day)

Monday, September 4 (Labor Day)

Three board seats are up for election in 2017; one for retired and two for active. Ballots and candida-cy forms have already been mailed. Returned bal-lots must be received by 4:30 p.m. on July 21, 2017, to be counted. The deadline to request a ballot, if you did not receive one, is July 7, 2017.

Don’t forget to cast your ballot!

Board News Save the Date!!

The 2017 North Coast Sunbird Reunion will be held on Satur-day, August 12, 2017, at the Ohio Veteran’s Home in Sandusky. Information is posted on HPRS, OSHPRA and TTT’s websites. Reservations are due by July 31st .

Hold the Date!!

OSHP Retirees’ Association Annual Dinner: October 21, 2017—Information to be forthcoming.

* PLEASE HELP US TO ENSURE YOUR INFORMATION

IS UP TO DATE. ANY ADDRESS, EMAIL, PHONE

NUMBER, MARITAL STATUS, DEPENDENT, OR JOB

STATUS CHANGES NEED TO BE GIVEN TO HPRS TO

PROVIDE THE BEST SERVICE TO OUR MEMBERS. *

THANK YOU FOR YOUR HELP!

2017 DISTRICT INFORMATIONAL MEETINGS:

I n continuing our efforts to keep our membership in-formed on important issues, we will be conducting

town hall-style meetings around the state beginning in July. Pension legislation and health care will be the focus of these meetings. We encourage all active and retired members and spouses to attend. Ample time has been allowed to answer all questions. The dates of the meetings are: July 14 Friday 9 AM Findlay

DHQ—1 July 14 Friday 1 PM Bucyrus DHQ—2

July 21 Friday 9 AM Cambridge DHQ—7

July 21 Friday 1 PM Columbus DHQ –6 at Academy Classroom A

July 27 Thurs. 10 AM Jackson DHQ—9 July 28 Friday 9 AM Warren DHQ—4 at Kent

State University, Trumbull Branch, Public Safety Build- ing, 4314 Mahoning Ave- nue NW, Warren, Ohio

July 28 Friday 1 PM Cleveland DHQ—3 at Brook Park facility, 5225 West 140th Street, Brook Park, Ohio

Aug. 4 Friday 9 AM Wilmington DHQ—8 Aug. 4 Friday 1 PM Piqua DHQ—5

Highway Patrol Retirement System Page 2

The Fourth Annual Retirees’ Cookout was held at the academy on June 23, 2017,

with over 450 in attendance.

Page 3 June 2017

The board has diligently worked to protect pension and health care benefits in spite of the continued rising costs of doing so. As you have read over the past several years, a number of factors have negatively impacted not only our retirement system, but most systems nation-wide.

As a result of the recent statutorily mandated 5-year ac-tuarial experience study which changed some of the as-sumptions by which HPRS operates, our funding status was negatively affected. It did not change the amount of our assets; it just altered the way in which future liabili-ties are calculated.

Consequently, legislative changes were needed to ensure HPRS remained compliant with Ohio law. Proposed legis-lation currently is pending action by the Ohio General Assembly. We will inform you when that legislation pass-es. The proposed legislation contains the following:

Restore the minimum unreduced retirement age to 52 (as it was prior to 1989) for new hires after Janu-ary 1, 2020 – all others are grandfathered. This is similar to what OP&F and OPERS-LE did in 2012.

Calculate pension benefits for off-duty disabilities based on years of service with a minimum 12-year service benefit (30%) instead of a minimum 20-year service benefit (50%).

Eliminate the automatic 50% unfunded survivor ben-efit and establish a set amount ($900.00) for survivor benefits while increasing that amount annually as the board determines – this does not affect those already retired or in DROP. A Joint and Survivor (JSA) benefit may still be chosen to provide similar or even in-creased benefits to spouses.

Provide no survivor benefits for those who marry after retirement – this does not affect those already married. Retirees will still have the option of chang-ing to a JSA to provide similar or even increased ben-efits to spouses.

Allow a former member of the Patrol who has suffi-cient age and 20+ years of qualifying service credit to apply for pension benefits even though he/she is no longer employed by the Patrol.

These changes will reduce our amortization period by several years and hopefully will allow for additional em-ployer contributions to be allocated to the health care fund.

Please plan to attend one of the district informational meetings for more information. The schedule is on the front page of this newsletter.

PROPOSED PENSION LEGISLATION

HPRS Investment Returns

Date Investment Portfolio Market Value YTD Increase/(Decrease)

6/15/2017 $857,000,000 6.2% (est.)

12/31/2016 $825,505,000 7.3%

12/31/2015 $809,209,000 (0.3%)

12/31/2014 $849,000,000 6.5%

12/31/2013 $813,953,000 19.6%

12/31/2012 $717,036,000 11.9%

Page 4 June 2017

Health Care costs continue to rise. To give you an idea, the average cost per person for the HPRS health care plan was over $740 per person per month in 2016.

Despite future uncertainties, the Board has continued with its mission to ensure that you, your spouses, and de-pendents will have access to quality health care. Over the course of the last several years, you have heard about different initiatives the Board has taken, including working closely with an independent health care consultant. A lot of work has been done and an entire package of comprehensive changes has been made that go into effect January 1, 2018. The Board is confident this health care overhaul will: (1) continue to provide top quality health care at very low rates compared to the market and other retirement systems; and (2) slow the rate of change in premiums and plan design changes in the future. The Board believes that future changes, if any, should be small-er and more predictable.

The changes fall into three areas: (1) plan design changes; (2) eligibility changes; and (3) premium changes. The Board, with its consultant, looked very closely at how the health care fund was utilized and how it compared to the market and best practices. Several improvements were suggested and adopted that work to provide the largest impact on solvency with the smallest impact to you. The following are the plan design changes going into effect on January 1, 2018:

(Continued on next page)

2018 HEALTH CARE CHANGES

2018 PLAN CHANGES

Increase Retail Prescription Drug Copays Increase from $5/$15 to $15/$30.

Increase Non-Medicare Deductible Increase from $500/$1,000 to $750/$1,500.

Add Medicare Deductible For Non-Copay Services Increase from $0 to $250.

Increase Medicare Specialist Copay Increase from $25 to $40.

Increase Non-Medicare Office Visit Copays Increase from $20 to $25.

Increase from $30 to $40.

Increase Non-Medicare Out-of-Pocket Maximum Increase from $1,500/$3,000 to $2,000/$4,000.

Increase Medicare Emergency Room Copay Increase from $50 to $75.

Increase Non-Medicare Emergency Room Copay Increase from $50 to $100.

Increase Medicare Inpatient Copay Increase from 100 to $200.

Increase Medicare Outpatient Copay Increase from $50 to $75.

Increase Non-Medicare Inpatient Copay Increase from $100 to $200.

Implement Narrow Retail Pharmacy Network Will be working with ESI for plan design de-tails and efficiencies.

Eliminate the Re-Employed Retiree Higher Premium Premium chart applies to all.

Page 5 June 2017

In addition to plan design changes, eligibility changes were made as a result of amendments in state and federal laws and regulations, and policy changes resulting from a review of how the HPRS coverage was being used. The following eligibility changes were made:

1. Beginning January 1, 2018, a child ages 18 and over must take coverage through employment, parent or step-parent employment, spouse employment, military service or a college or university if it is available. These restrictions do not apply to children under 18.

2. Beginning January 1, 2018, a spouse that is Medicare eligible and has access to coverage through employ-ment or as a retiree of another retirement system must secure that coverage as primary. This does not affect spouses that enroll in the HPRS Medicare plan before January 1, 2018.

3. Any member that enters DROP or retires, whichever is earlier, after January 1, 2020 must have 20 years of combined HPRS, OP&F, or military service that occurred while a member of HPRS to be eligible for HPRS health care coverage. We do not anticipate that this change will affect many, if any members.

Finally, the Board, its consultant and staff put a great deal of effort into creating a more structured way to calcu-late premiums. Each year, premiums will be based on a specific formula with detailed guidelines that take into account changes in health care costs and changes in the HPRS plan and membership. In the past, the Board painstakingly reviewed health care costs and made premium decisions with the best information it had at the time. This new structure should greatly improve that system. Most importantly, it should minimize future in-creases and make increases, if necessary, more balanced and predictable. This new system has also simplified the HPRS premium structure. For instance, there will no longer be a special, higher rate for reemployed retirees. There will be one rate based on your age. So, if you are 60 and working, you will pay what every other 60 year-old retiree pays.

The 2018 premiums are listed on the following page.

2018 HEALTH CARE CHANGES CON’T

As of 6/15/2017 Number Average Pension Benefit Average Age

Age and Service Retirees 1,204 $45,008 66.8

Disability Retirees 132 $34,710 54.5

Surviving Spouses & Children

256

22

$18,227

$2,118

75.5

21.3

TOTAL 1,614 $39,324 66.5

HPRS Facts & Figures

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Highway Patrol Retirement System Page 7

Later this summer many of you will be receiving a letter from the Summit County Internal Audit Department re-

questing copies of your marriage certificate and/or your children’s birth certificates. Our internal auditors are re-

quiring that we obtain proof of eligibility for HPRS health insurance from our membership. If you receive a letter

and believe you have already sent us the requested information, please contact HPRS. We are working with Sum-

mit County IAD to complete our records and appreciate your help in this endeavor. If you have any questions,

feel free to contact Mike Press at 614-430-3558. Thank you.

Health Care Eligibility Letter

NEW MEDICARE CARDS OFFER GREATER PROTECTION TO MORE THAN 57.7 MILLION AMERICANS New cards will no longer contain Social Security numbers, to combat fraud and illegal use

The Centers for Medicare & Medicaid Services (CMS) is readying a fraud prevention initiative that removes Social Security numbers from Medicare cards to help combat identity theft, and safeguard taxpayer dollars. The new cards will use a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI), to replace the Social Security-based Health Insur-ance Claim Number (HICN) currently used on the Medicare card. CMS will begin mailing new cards in April 2018 and will meet the congressional deadline for replacing all Medicare cards by April 2019. Today, CMS kicks-off a multi-faceted outreach cam-paign to help providers get ready for the new MBI.

“We’re taking this step to protect our seniors from fraudulent use of Social Security numbers which can lead to identity theft and illegal use of Medicare benefits,” said CMS Administrator Seema Verma. “We want to be sure that Medicare beneficiaries and healthcare providers know about these changes well in advance and have the information they need to make a seamless transition.”

Providers and beneficiaries will both be able to use secure look-up tools that will support quick access to MBIs when they need them. There will also be a 21-month transition period where providers will be able to use either the MBI or the HICN further easing the transition.

CMS testified on Tuesday, May 23rd before the U.S. House Committee on Ways & Means Subcommittee on Social Security and U.S. House Committee on Oversight & Government Reform Subcommittee on Information Technology, addressing CMS’s com-prehensive plan for the removal of Social Security numbers and transition to MBIs.

Personal identity theft affects a large and growing number of seniors. People age 65 or older are increasingly the victims of this type of crime. Incidents among seniors increased to 2.6 million from 2.1 million between 2012 and 2014, according to the most current statistics from the Department of Justice. Identity theft can take not only an emotional toll on those who experi-ence it, but also a financial one: two-thirds of all identity theft victims reported a direct financial loss. It can also disrupt lives, damage credit ratings and result in inaccuracies in medical records and costly false claims.

Work on this important initiative began many years ago, and was accelerated following passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). CMS will assign all Medicare beneficiaries a new, unique MBI number which will contain a combination of numbers and uppercase letters. Beneficiaries will be instructed to safely and securely destroy their current Medicare cards and keep the new MBI confidential. Issuance of the new MBI will not change the benefits a Medicare beneficiary receives.

CMS is committed to a successful transition to the MBI for people with Medicare and for the health care provider community. CMS has a website (https://www.cms.gov/medicare/ssnri/index.html) dedicated to the Social Security Removal Initiative (SSNRI) where providers can find the latest information and sign-up for newsletters. CMS is also planning regular calls as a way to share updates and answer provider questions before and after new cards are mailed beginning in April 2018.

1900 Polaris Parkway, Suite 201

Columbus, OH 43240-4037

Page 8

1900 Polaris Parkway, Suite 201

Columbus, OH 43240-4037

614-431-0781 (Columbus)

800-860-2268 (Toll-Free)

(Press * for a dial-by-name directory)

Email: system@ohprs.org

Website: www.ohprs.org

S/Lt. Heidi Marshall, Chair

Maj. (ret.) Darryl Anderson, Vice

Chair

Maj. (ret.) JP Allen

Kenneth Boyer

Capt. Cory Davies

Lt. (ret.) Larry Davis

Sgt. Jeremy Mendenhall

Col. Paul Pride

S/Lt. Matthew Them

Lt. Andre Swinerton

Joseph Thomas

HPRS Board of Trustees

In our last newsletter, I discussed proposed legislative changes that were needed to improve the sol-vency of our system. That legisla-tion is pending in the Ohio General Assembly, and the details are listed on Page 3. After a year of analyzing and de-bating health care issues, at its De-cember 2016 meeting, the board approved HPRS’s program for the future. The current Medicare Ad-vantage and self-funded plans will continue. A cost-sharing structure has been formalized to spread the

cost of health care between HPRS and its members which is similar to the structure already in place. Please see the article on health care along with administrative code and benefit changes beginning on Page 4. Even though these changes are not as severe as some recommend-ed by the consultant, they are pro-jected to add years of solvency to the health care fund. On the front page of this news-letter, a schedule of district infor-mational meetings that begin on July 14th is listed. I, along with at

least one board member, will ad-dress the legislative and health care changes. I will also provide infor-mation on the November 2017 bal-lot initiative, Ohio Drug Price Relief Act. Please take this opportunity to have your questions answered. —Mark Atkeson

From the Director