Retiree Health Insurance Resources For Participants of the Optional Retirement Plan (ORP)
Introduction and Background
When you were hired at Mott (or were promoted to an eligible employee group), you selected to become a participant of the Optional Retirement Plan (ORP). In place of the MPSERS pension based on a formula of years of service and final average salary, you received cash contributions to a 403(a) retirement account based on a percentage of your earnings. All employer and employee contributions to this account are immediately vested, meaning from day one, you own 100% of the funds in the plan.
As you are aware, a major piece of the MPSERS pension that you are not eligible for when you chose to participate in the ORP is the ability to receive a health insurance subsidy from the MPSERS system, provided certain eligibility criteria are met (such as certain number of years of service).
ORP Retiree Health Committee
A committee consisting of representatives from the Faculty, S&M, Pro-Tech and Exempt groups was formed to research and recommend a way for those enrolled in the ORP plan to purchase health insurance when they retire from the College. This committee researched and evaluated different ideas that would serve this purpose. It encountered many challenges such as the recently adopted Governmental Accounting Standards Board (GASB-45) rules that created added costs and liabilities of offering an employer group health plan to retirees. These costs would have to be passed on, resulting in a premium that would well exceed the market rate of purchasing an individual health plan. Consequently, offering an employer-sponsored group health plan is not a viable or practical option, and a one-size-fits-all health plan is not necessarily the best approach to meeting the many different needs of retirees seeking health insurance. For example, some individuals are healthier than others, some have a higher risk tolerance (accepting lower premiums in exchange for less coverage should a claim occur), and some individuals who have reached Medicare age are interested only in a Medicare supplement, not a full insurance product.
After evaluating all of the available options, the committee agreed that the best approach for assisting ORP retirees with the daunting task of purchasing health insurance was to provide resources to assist them. The result: this informational packet which provides a variety of resources and tips for purchasing retiree health insurance.
Resources Provided in this Packet
- A list of Independent Insurance Agents that have been approved by the ORP Retiree Health Committee based on selected criteria. These agents are available to meet with you, assess your insurance needs and provide you with competitive quotes from multiple insurance companies.
- Information regarding individual Blue Cross - Blue Shield plans available.
- Information on extending your coverage for a limited amount of time in the MCC insurance plan you are enrolled in at retirement, under the Consolidated Omnibus Budget Reconciliation Act (COBRA). The full monthly premium plus a 2% administrative markup is your responsibility under this option. A specific notice of your COBRA rights will be mailed to you when your coverage under the MCC plan ends. If you are planning ahead for retirement and are interested in this option, you may request a COBRA quote from your HR services representative.
Hopefully you find the following resources helpful as you begin the important process of finding the best insurance that meets your health and budget needs. If you have a question regarding the information or agent referrals provided in this packet, please call a representative of the Human Resources Office at 810-762-0565.