1. Office of Group Benefits Tommy D. Teague Chief Executive Officer
TODAY’S SMART CHOICES...
TOMORROW’S HEALTHY SAVINGS
Office of Group Benefits
Tommy D. Teague
Chief Executive Officer

2. Eligibility Full-time employees and retirees of…
state agencies
state colleges and universities
participating school boards
…and legal dependents:
Legal spouse
Never-married child from birth to age 21
Never-married child age (if full time student)
Effective date of coverage is first day of month after enrollment plus 30 days

3. OGB Plan Member Premiums
Plan member pays 25% of premium for self
Plan member pays 50% of premium for any dependents
Aggregate contribution level is 29% by plan member

4. Retiree Health Coverage

5. OGB Health Plans 4 plans -- for all plan members
PPO (self-insured & administered by OGB)
HMO (self-insured; administered by Humana)
EPO (self-insured; administered by UnitedHealthcare)
Medical Home HMO (fully-insured & administered by Vantage)

6. OGB Medicare Advantage Health Plans
5 plans – only for retired plan members with Medicare Part A & Part B
3 Medicare Advantage HMO plans
Humana HMO (only in certain areas of LA)
Peoples Health (only in certain areas of LA)
Vantage/POS Option (statewide)
2 Private Fee-for-Service (PFFS) plans
Humana PFFS (nationwide)
SecureHorizons Medicare Direct (nationwide)

7. OGB Health Plan Enrollment
Total Enrollment 132,305***
Active employees 86, %
Retired employees 46, %
*** figures don’t include LSU plans

8. OGB Budget
FY 2010
$1.264 billion

9. Fund Balance as of August 14, 2009
Fiscal Year
Fund Balance as of August 14, 2009
$484,176,551

10. OGB Administrative Costs
MEDICAL BENEFITS
MEDICAL BENEFITS
DRUGS
ADMINISTRATIVE
MENTAL HEALTH
Administrative costs are 3% of total costs

11. OGB Organization 332 employees 5 divisions Benefit Services
Customer Services
Information Services
Quality Assurance & Administration
Legal & HIPAA

12. OGB Organization

13. OGB Organization

14. Enrollment Retired Employees 46,573 With Medicare 27,854
(Medicare is primary) 59%
Without Medicare 18,719
(OGB is primary) %

15. Life Insurance Group term life plan Prudential
State pays 50% of premium for employees and retirees
Employee pays premium for dependent life
Reduced coverage and premiums, on July 1 after reaching age 65 and age 70

16. Life Insurance Basic Plan Option I Option II Employee $5,000 Spouse
$1,000
$2,000
Each Child
$ 500

17. Basic Plus Supplemental Plan
Life Insurance
Basic Plus Supplemental Plan
Option I
Option II
Employee:
Based on schedule to
maximum of $50,000
Based on employee’s
annual salary
Spouse
$2,000
$4,000
Each child
$1,000

18. GASB 45 / OPEB Liability
Historically, governments accounted for retiree health care benefits on pay-as-you-go (PAYGO) basis.
Cost of covering active employees was only a function of current year costs
Did not reflect total cost of employee health coverage …only included current year
Without projected future costs, governmental entities’ financial statements did not fully disclose all costs
GASB requires disclosure of future costs associated with current services
Those future costs are classified as OPEB

19. GASB 45 / OPEB Liability
OPEB (other post-employment benefits) – a compilation of all non-pension benefits an employee receives after retirement
Examples include:
Health benefits
Dental, vision and hearing coverage
Prescription drug coverage
Life insurance
Long-term care commitments
Long-term disability

20. GASB 45 / OPEB Liability Liability calculation assumptions:
Benefit composition
Medical inflation
Turnover rate
Mortality assumption
Will employee live to reach retirement?
How long will retiree live in retirement?
Discount rate
Other factors that affect number of dependents

21. GASB 45 / OPEB Liability
GASB 45 does not require funding of the calculated liability
Decision to fund or not is significant:
Funded plans have lower liabilities
Unfunded plans have larger liabilities
Rating agencies may consider funding
Funding requirements are strict; funds must be held in irrevocable trust
Depending on funding or not:
State’s liability now stands at
$13.7 billion over 30 years….and growing