IMPORTANT INFORMATION ABOUT THE STATE'S CONTRIBUTION
TOWARD RETIREE HEALTH PLAN PREMIUMS
(including surviving spouse and/or dependents of retiree)
In 2001, the Louisiana Legislature enacted a law that established a schedule for the amount that the state, school boards and other participating agencies (collectively, "the state") shall contribute toward the premium for retiree coverage based upon years of participation in an OGB health plan before retirement.Here are some important things you should know about the "participation schedule" established in that law.
Your state contribution is not affected by the participation schedule if you retired before January 1, 2002, and continued your health coverage through OGB. Under the law, you will continue to receive the state contribution toward the premiums that is currently set at 75 percent.
Your state contribution is not affected by the participation schedule if you were covered by an OGB health plan before January 1, 2002, and you maintain continuous coverage through retirement. Under the law, you will receive the state contribution toward the premiums for retiree coverage that is currently set at 75 percent.
Your state contribution is affected by the participation schedule if:
your coverage in an OGB health plan began on or after January 1, 2002; or
you previously had coverage in an OGB health plan, dropped coverage, and rejoined on or after January 1, 2002; or
you have a break in coverage after January 1, 2002.
If it applies to you, the participation schedule sets the state's contribution toward the premium for retiree coverage as follows:
Retiree Participation Schedule
Years of OGB Plan Participation
State’s Share of Total Monthly Premium
20 years or more
75 percent
15 years but less than 20 years
56 percent
10 years but less than 15 years
38 percent
less than 10 years
19 percent
This schedule also applies to the state's contribution toward the premium
for coverage of retirees' surviving spouses and dependents whose coverage in
an OGB health plan began on or after July 1, 2002, or who had previous coverage,
dropped that coverage and rejoined on or after July 1, 2002, or who experienced
a break in coverage after July 1, 2002.
Participation in an OGB health plan includes all participation in health plans available to employees of OGB participant employers,
for which the state contributes a share of the premium, including self-insured plans such as the PPO and HMO plans,
fully-insured plans such as the MCO plan the Medical Home HMO plan, consumer driven plan such as the CD-HSA,
and other health plan options such as the LSU System health plan.
Participation also includes COBRA continuation coverage in an OGB health plan.
If the participation schedule does apply to you, then at the time of retirement, your years of participation in OGB health plans must be certified by the employer from which you will retire.
The certification must be based on business records maintained by your employer or provided by you.
The business records must be available to OGB, the Division of Administration and the Legislative Auditor upon request.
Not more than 120 days before your scheduled date of retirement, and upon request, OGB will provide to your employer all information in its possession relating to your participation.
At the time of application for surviving spouse and/or surviving dependent coverage, OGB will, upon request, provide all information in its possession relating to participation of such surviving spouse and/or surviving dependent.
When applicable, the participation schedule sets the state's contribution toward the premium for retiree coverage. It does not establish eligibility for retiree coverage. To be eligible for retiree coverage, you must:
be a covered employee in an OGB health plan immediately prior to retirement;
elect to continue your coverage at the time of retirement; and
immediately receive retirement benefits from an approved state or governmental defined benefit plan.
LASERS air time purchases allowed by Act 322 affect retirees’ OGB health plan premiums
A new state law allows employees with at least five years of service credit in the Louisiana State Employees’ Retirement System (LASERS) to purchase up to five years of service credit (commonly called air time) in one-year increments that can be used for retirement eligibility. Act 322 of 2011 became effective July 1, 2011.
Act 322 also provides that an employee who purchases air time for retirement eligibility and retires earlier than he otherwise would have been eligible to retire must pay the increased employer share of the monthly premium for OGB health coverage until he reaches the age at which he would have attained regular retirement eligibility.
The OGB health plan premium provisions of Act 322 do not apply to:
Employees who have 20 or more years of earned service credit in LASERS; or
Employees with fewer than 15 years participation in an OGB health plan prior to retirement to whom the provisions of the retiree participation schedule apply.
The provisions of Act 322 regarding OGB health plan premiums apply only to an employee who is able to retire early by purchasing air time, but do not apply to an employee who is eligible for regular retirement under LASERS retirement rules – even if he purchases Act 322 air time.
Any employee who has 20 or more years of earned service credit in LASERS is eligible for actuarially reduced retirement at any age, which is considered regular retirement. This means retirees with 20 or more years of earned service credit in LASERS are not subject to the OGB premium provisions of Act 322 because they are not considered Act 322 early retirees. Additional information about Act 322 prepared by LASERS that explains the purchase and use of air time for retirement eligibility can be found on the LASERS website,
http://www.lasersonline.org/site.php?pageID=20&newsID=78.
A retiree subject to the OGB participation schedule who has fewer than 15 years participation in OGB health plans prior to retirement qualifies for either the 38 percent or 19 percent state contribution level. The employer share of the premium is already reduced to 38 percent or 19 percent based on the OGB retiree participation schedule, so this retiree would already pay an increased employee share.
The additional premium will be deducted from the retiree’s monthly benefit check and remitted to OGB. The Act 322 early retiree rate schedules show the monthly premium contributions that apply to an early retiree who became eligible to retire based on the provisions of Act 322. Act 322 early retirees are required to pay a higher premium contribution than regular retirees. These schedules are based on current OGB health plans and premium rates and will be adjusted as necessary to reflect subsequent changes to health plan offerings and premium rates.
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