OPERS Health Care The OPERS Health Care Allowance

OPERS pays a portion of the full cost of health care coverage based on your age when you first enroll in the OPERS Retiree Health Plan and your years of service at retirement.

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What is the Health Care Allowance?

Pre-Medicare Retirees

The health care allowance is the monthly amount provided to you by OPERS to offset the total cost of your monthly premium. The difference in the total cost and the allowance provided is your monthly premium which is deducted from your retirement benefit.

Pre-Medicare spouses are responsible for the full cost of the health care premium amount.

Connector Participants

If you are enrolled in Medicare Parts A and B and select an individual Medicare plan through the Connector, the health care allowance percentage is reflected in the monthly deposit to your health reimbursement arrangement account.

Spouses enrolled in Medicare Parts A and B do not receive a health reimbursement arrangement account.

Increasing Your Allowance

Your allowance is based on both your service credit and when you enroll in OPERS health care.

The longer you work, or the longer you defer enrollment in OPERS health care, the higher your health care allowance could be.

How Your Allowance is Calculated

In order to calculate your allowance, you must:

  1. Understand the full premium amount (for pre-Medicare retirees) or the health reimbursement arrangement allowance maximum (for retirees enrolled in Medicare Parts A and B)
  2. Determine your allowance percentage
  3. Calculate your monthly allowance
Allowance Basics:
The full premium amount / health reimbursement arrangement allowance maximum

Before the dollar amount can be determined, two numbers must be defined: the full health care premium amount and health reimbursement arrangement allowance maximum.

Full health care premium amount
(for pre-Medicare retirees)

Every year the OPERS Board of Trustees approves health care premiums for the following year.

Premiums will most likely change year to year based on:

  • Health care utilization and costs
  • Medical and prescription drug trends
  • Plan design adjustments
  • Administrative fees

Health reimbursement arrangement allowance maximum
(for Medicare-eligible retirees)

The current health reimbursement arrangement allowance maximum amount was based on trends in the marketplace of what other companies offer.

Other key factors included:

  • The average monthly premium for a secondary Medicare plan
  • The average Medicare Part B premium
  • Pharmacy plan coverage and prescription drug costs
  • Additional out-of-pocket expenses

Determining your allowance percentage

Once you know the full premium amount (for pre-Medicare retirees), or the health reimbursement arrangement amount (for retirees enrolled in Medicare Parts A and B), you can use this number to determine your allowance.

To determine your allowance percentage, compare the table below to the following:

The minimum allowance amount is 51%, while the maximum is 90%.
Health Care Allowance Percentage
Years of Service / Age606162636465+
2051%54%57%60%63%66%
2153%56%59%62%65%68%
2255%58%61%64%67%70%
2357%60%63%66%69%72%
2459%62%65%68%71%74%
2561%64%67%70%73%76%
2663%66%69%72%75%78%
2765%68%71%74%77%80%
2867%70%73%76%79%82%
2969%72%75%78%81%84%
3071%74%77%80%83%86%
3173%76%79%82%85%88%
3275%78%81%84%87%90%
3376%79%82%85%88%90%
3477%80%83%86%89%90%
3578%81%84%87%90%90%
3679%82%85%88%90%90%
3780%83%86%89%90%90%
3881%84%87%90%90%90%
3982%85%88%90%90%90%
4083%86%89%90%90%90%
4184%87%90%90%90%90%
4285%88%90%90%90%90%

Putting it all together

Using the allowance percentage from the table above, you can then apply it to determine your monthly allowance.

Pre-Medicare

$1,305.95 (the full 2019 adult monthly premium) multiplied by your allowance percentage represents what OPERS pays each month toward your full premium cost.

The remainder is what you would pay as your monthly premium.

Medicare-Eligible

Your allowance percentage, multiplied by $450 (the health reimbursement arrangement maximum amount) represents the amount deposited monthly into your health reimbursement arrangement.


Examples of the Health Care Allowance

Example Retiree: Jim

Jim

Retired at 65 Worked 32 years in an OPERS-covered position

Jim worked 32 years in an OPERS-covered position and retired at the age of 65.

Because he is 65 and enrolled in Medicare Parts A and B, he will enroll in an individual Medicare plan through the Connector, and be eligible to receive a health reimbursement arrangement allowance.

Using the percentage table as a guide, Jim determines he will receive 90 percent of the total allowance amount in his account each month.

Jim's allowance

$450 Maximum Amount
0.90 Jim's Allowance: 90%
$405 Jim's monthly
HRA Allowance
Example Retiree: Mary

Mary

Retired at 60 Worked 20 years in an OPERS-covered position

After spending time in the private sector, Mary worked 20 years in an OPERS-covered position and retired at the age of 60.

Mary is eligible for, and chooses to enroll in, the OPERS Retiree Health Plan.

Using the percentage table as a guide, Mary determines her allowance is 51 percent, meaning she is responsible for 49 percent of the total monthly premium cost.

Mary's premium

$1,305.95 2019 Premium Cost
0.49 Mary's responsibility: 49%
$590.92 Mary's monthly premium after $49 preium reduction is applied.
Example Retiree: Paul

Paul

Retired at 62 Worked 29 years in an OPERS-covered position

Paul worked 29 years in an OPERS-covered position and retired at the age of 62.

Paul is eligible for, and chooses to enroll in, the OPERS Retiree Health Plan.

Using the percentage table as a guide, Paul determines his allowance is 75 percent, meaning he is responsible for 25 percent of the total monthly premium cost.

Paul's premium

$1,305.95 2019 Premium Cost
0.25 Paul's responsibility: 25%
$277.49 Paul's monthly premium after $49 preium reduction is applied.

Although OPERS understands the importance of offering health care coverage, our board has the discretion to review, rescind, modify or change our health care coverage at any time.