The benefit of the retiree health insurance bargained this contract year was a great feat for both parties. The following provides some background history as to why it was bargained and facts about the plan. Prior to 2003, teachers did not have a retiree health subsidy. A retiree health subsidy is important in light of the cost of retiree health insurance. The reality is the older you are, the larger the healthcare costs.
In 2003, the Nevada Legislature passed NRS 287.023 (4) which allowed local government employees, including school district employees to participate in the Public Employees’ Benefit Program (“PEBP”) upon retirement. PEBP provided a subsidy for qualified school district employees who retired. This subsidy was only available to retirees enrolled on the state plan.
This last legislative session, the Nevada Legislature passed SB 544 (2007) which amended NRS 287.023. Effectively, the legislature gave school district employees the ability to join PEBP and receive the subsidy if they retire by November 2008. After November 30, 2008, school district employees will not be eligible to join PEBP.
As a result of Nevada Legislature’s elimination of retiree health insurance, it was incumbent upon CCSD and CCEA to negotiate retiree health for licensed personnel.
The Retiree Health Trust (“RHT”) is its own separate entity. Like the Teachers Health Trust, it has its own Board, its own accounts, and although not subject to ERISA (Employee Retirement Insurance Security Act of 1974), RHT intends to follow ERISA guidelines to the extent feasible. Beginning January 2009, teachers who retire with the school district will be eligible for the retiree health insurance provided by the RHT. The RHT has entered into a contract with the Teachers Health Trust (“THT”) to administer the health insurance. Licensed personnel can expect to receive the same benefits as provided by the THT Platinum Plan with some additional services. Because this is a retirement plan, it offers portability.
The longer you work at CCSD as licensed personnel, the larger the subsidy provided by the plan. There are four subsidy tiers based upon the years of service. If you retire with 30 years or more, you will receive a 68% subsidy; 26-29 years of service, provides a 55% subsidy; 20-25 years, a 45% subsidy; and 10-19 years, a 30% subsidy.
There is an additional incentive subsidy based upon unused sick leave. For each 50 days of unused sick leave above 100 days —150 days=1% extra; 200 unused sick leave days=2%; 250 unused sick leave days=3%; and 300 days of unused sick leave = 4%. Article 18-8 and 18-9 of the CCEA/CCSD Negotiated Agreement are not negated. Licensed personnel will continue to be able to double and triple dip for benefits in exchange for unused sick leave days.
Let me provide an example of the benefit of the plan as it is currently structured, using teacher X as an example. As of September 2008,Teacher X is 32 years old, has been with CCSD 8 years and plans to retire after 30 years of service, i.e. in 21 years. Teacher X will be 53 at the time of retirement, not yet eligible for Medicare. At the time of retirement, Teacher X would have paid approximately $7,560.00 out of pocket from the current $15 per paycheck contribution. Teacher X, would receive $9,539.04 in the first year alone in a subsidy towards retiree health insurance based on the current plan. With the current plan, by the age of 65, Teacher X would have received a subsidy benefit of $114,468.48.
This plan provides a real option for teachers who devote their careers to Clark County. As retention is an important issue to CCEA and CCSD, the RHT is an innovative solution that no doubt will have a positive impact in your individual futures.