Years Ended September 30, 2017 and 2016
Note 10 – Post-Employment Benefits
Post-employment health care benefits are offered to all employees who officially retire from the University through the Alabama Retired Education Employees’ Health Care Trust with TRS or retired employees may elect to continue to participate in the University’s group health plan until they are eligible for Medicare by paying the full cost of the plan premium. TRS offers health care benefits through a cost- sharing multiple-employer defined benefit health care plan administered by the Public Education Employee Health Insurance Plan (“PEEHIP”). Retired employees age sixty- five or older who are eligible for Medicare must enroll in the Medicare Coordinated Plan under which Medicare is the primary insurer and the University’s health care plan becomes the secondary insurer. Despite the availability of the University’s plan, most retirees elect to participate in the PEEHIP with TRS, in which case the retirees pay a portion of the PEEHIP premium, with the University paying an allocation toward the cost of retiree coverage.
PEEHIP offers a basic hospital/medical plan that provides basic medical coverage for up to 365 days of care during each hospital confinement. The basic hospital/medical plan also provides for physicians’ benefits, outpatient care, prescription drugs, and mental health benefits. Major medical benefits under the basic hospital/ medical plan are subject to a lifetime contract maximum of $1.0 million for each covered individual. The Code of Alabama 1975, Section 16-25A-8 provides the authority to set the contribution requirements for retirees and employers.
The required rates of retirees are as follows as of September 30, 2017:
Retired Member Rates:
-Individual Coverage/Non-Medicare Eligible - $166
-Family Coverage/Non-Medicare Eligible Retired Member and Non-Medicare Eligible Non-spousal Dependent(s) - $421
-Family Coverage/Non-Medicare Eligible Retired Member and Non-Medicare Eligible Dependent(s) with Non-Medicare Eligible
Spouse - $521
-Family Coverage/Non-Medicare Eligible Retired Member and Non-spousal Dependent Medicare Eligible - $280
-Family Coverage/Non-Medicare Eligible Retired Member and Spouse Dependent Medicare Eligible - $310
-Individual Coverage/Medicare Eligible Retired Member - $25
-Family Coverage/Medicare Eligible Retired Member and Non- Medicare Eligible Dependent(s)—No Spouse - $280
-Family Coverage/Medicare Eligible Retired Member and Non- Medicare Eligible Dependent(s)—with Non-Medicare eligible
Spouse - $380
-Family Coverage/Medicare Eligible Retired Member and Non-spousal Dependent Medicare Eligible - $139
-Family Coverage/Medicare Eligible Retired Member and Spousal Dependent Medicare Eligible - $169
The required contribution rate of the employer was $373 per employee per month in the year ended September 30, 2017. The University paid $8.4 million and $8.9 million for the years ended September 30, 2017 and 2016 for 1,924 and 1,886 retirees, respectively. The required contribution rate is determined by PEEHIP in accordance with state statute. The complete financial report for PEEHIP can be obtained by contacting TRS at 1-877-517-0020.
Certain retirees may also elect to continue their basic term life insurance coverage and accidental death and dismemberment insurance up to certain maximum amounts. The retirees pay the full amount of the premiums in such cases. Retirees with 25 or more years of credited service are eligible for tuition assistance benefits for themselves as well as for their spouse and unmarried dependent children.