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Dartmouth Retiree Health Plan: Changes to Original CBC Proposal Based on Employee Comments. March 2008. Original Charge from Trustees. Curb the growth in the accrued pension benefit obligation on the College balance sheet.

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dartmouth retiree health plan changes to original cbc proposal based on employee comments

Dartmouth Retiree Health Plan: Changes to Original CBC Proposal Based on Employee Comments

March 2008

original charge from trustees
Original Charge from Trustees
  • Curb the growth in the accrued pension benefit obligation on the College balance sheet.
  • Assure that the accrued pension benefit obligation does not have a negative impact on the financial health of the College.
original cbc objectives and guidelines
Original CBC Objectives and Guidelines
  • Control health plan costs.
  • Manage long-term institutional financial obligation.
  • Create a viable and sustainable benefit.
  • Protect current retirees from undue financial burden.
  • Sustain access to a retiree health plan for current and future employees.
  • Help employees plan for their medical care during retirement.
  • Avoid placing Dartmouth at a competitive disadvantage with its peers.
original cbc proposal presented to employees for comment fall 2007
Original CBC Proposal (Presented to Employees for Comment - Fall 2007)
  • Plan Design: Out-of pocket expenses mirror current employee plan
  • Eligibility: Employees age 55+ and 10 years of continuous benefits-eligible service
  • College Contribution: Based on age plus years of service on June 30, 2009
    • Minimum 40% and maximum 85% for existing employees
    • Access only to the plan for future employees
commonly heard employee comments
Commonly Heard Employee Comments
  • Reconsider making any changes to the plan.
  • Grandfather in existing employees.
  • Provide 100% subsidy for employees who qualify now for the “Rule of 75”.
  • Weight years of service more heavily than age.
  • Extend the implementation date into the future.
  • Remove the 85% maximum subsidy.
  • Make the proposal more affordable – particularly for lower-income employees.
reordered priorities based on employee comments
Reordered Priorities Based on Employee Comments
  • Provide full subsidy for employees who meet the “Rule of 75” on July 1, 2009 (reduce feelings of urgency to retire).
  • Weight years of service more than age in the formula used to calculate the College subsidy.
  • Reduce proposed out-of-pocket expenses for current retirees.
  • Increase minimum College subsidy above the proposed 40%.
the new retiree health plan for pre july 1 2009 employees
The New Retiree Health Plan for Pre-July 1, 2009 Employees
  • In consultation with actuaries, a mathematical formula was devised that:
    • raises the lowest premium subsidy from 40% to 50%;
    • raises the maximum premium subsidy from 85% to 100%;
    • weights years of service twice as heavily as age; and
    • provides an additional subsidy to any employee who earns less than $60,000.
    • The formula drives the calculator that figures each employee’s retiree health premium subsidy <www.dartmouth.edu/~hrs/benefits/retirement/calc.php>
the new retiree health plan for post july 1 2009 employees
The New Retiree Health Plan for Post-July 1, 2009 Employees
  • Employees hired on or after July 1, 2009, will have access only to Dartmouth’s health plan at retirement.
  • A savings vehicle (type yet to be determined) will be created to allow for new employees to receive up to a $3,000 match toward retiree health care savings.
the new health insurance plan design for retirees
The New Health Insurance Plan Design for Retirees
  • Effective January 1, 2009
  • Deductible: Retiree pays $250 per calendar year. (Deductible is for medical only.)
  • Co-insurance on Medical: Insurance pays 80% of Medical Expenses.
  • Co-insurance for Prescriptions (Rx): Insurance pays 70% of Prescription Costs.
  • Annual Out-of-Pocket Maximum: $900 (Medical $450, Rx $450)
  • No change in services available or covered
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