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The Medical Expense Reimbursement Program of the HPAE Retiree Medical Trust
In contract surveys of the HPAE membership, retiree health benefits ranks among our top five concerns, along with wages, staffing, pensions, and health benefits.
This is not surprising. Even if we are fortunate to have health insurance coverage when we retire, we still will face significant costs from deductibles, co-payments, and out-of-pocket costs that are not covered by our insurance.
And as we get older, our medical costs increase. Do you know that?:
o The average retiree spends 22% of their income on health care costs. o A couple that retires today will spend $523 month on medical costs not covered by Medicare.
Until the recent negotiations, most HPAE members had no retiree health benefits in their contracts. HPAE members who work for public employers, such as UMDNJ and Runnells, do participate in a retiree health benefits program, but that program does not cover all medical costs. In the future, retiree health benefits for public employees may be further reduced in response to demands to reduce the state’s deficit.
Many HPAE members spend 20, 25, or 30 years of their work lives taking care of patients as dedicated, skilled professionals. After all of those years, we deserve to receive to some support for our medical needs when we retire.
With the assistance of an attorney who specializes in setting up retiree medical programs, Shana Saichek, we have created the Medical Expense Reimbursement Program of the HPAE Retiree Medical Trust. The Trust is a multi-employer, non-profit trust that receives tax advantages under the IRS tax code, 501c(9).
The Trust will be governed by an equal number of Union and employer Trustees. The Trustees will hire professionals to administer the reimbursement program, including a third party administrator (TPA), an attorney, an actuary, and a financial investor.
The Trust is what is known as a “VEBA” or Voluntary Employees Beneficiary Association. Because of its tax status, a VEBA allows contributions for post-retirement medical expenses to be contributed with pre-tax dollars, to accrue interest without taxation, and finally, to be received by retirees on a tax-free basis. For more information on VEBAs, click here
In the recent negotiations, Local 5185/Bayonne Medical Center bargained an employer contribution to the HPAE Retiree Medical Trust of $.20/hour, which will begin January 2008.
The following locals have negotiated that members will vote this fall on whether their bargaining unit will participate in a mandatory employee contribution to the Trust:
If members vote in favor of such participation, then there will be a payroll deduction (in pre-tax $) of $.20/hour for all covered employees. This means that all members eligible to participate in the program will have a mandatory payroll deduction: there is no individual election of benefits. On the other hand, if the members of a bargaining unit vote against participation, then no one in the bargaining unit can participate through payroll deduction.
This was just the first step. In contract negotiations in 2009, we will attempt to have employers make significant contributions to the HPAE Retiree Medical Trust so that all HPAE members have the retiree health benefits that they deserve.
HPAE members in the locals listed above have received a brochure providing information on the Medical Expense Reimbursement Program of the HPAE Retiree Medical Trust. To read this brochure on-line, click here
For additional information on our program, please click here
If you have specific questions or concerns about the program, email your question or concern to mslott@hpae.org. |
HPAE Members Voted Overwhelmingly to join the Retiree Health Plan
Visit the Benserco Inc website for more information
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That
is why the HPAE State Executive Council decided to develop a medical
expense reimbursement program for retirees this year and to bargain
contributions to this program as part of the 2006 One Voice
negotiations. This reimbursement program will allow retirees to get
reimbursed for various medical costs, based on the benefits that they
have accrued upon retirement