Grand Rapids Public School District to consider shifting Medicare-eligible retirees to Medicare Advantage plan to reduce OPEB liability

Superintendent Matt Gross opened the Grand Rapids Public School District work session by focusing on retiree health benefits (OPEB) and recommending a change for Medicare-eligible retirees that the administration says would reduce long-term costs and property tax pressure.

District leaders told the board they plan to bring a recommendation to the board for a vote on Oct. 6 to transition Medicare-eligible retirees out of the district's self-insured plan and into a fully insured Medicare Advantage group plan proposed by Blue Cross Blue Shield; if implemented as modeled, staff estimates roughly $2 million in district savings that would otherwise add to the property tax levy.

Why it matters: The board was presented financial and plan-design data showing a current actuarial OPEB liability of about $126,000,000 and a history of a 2009 trust originally funded with $35,000,000 in bonds. Staff said the trust paid roughly $52,000,000 in benefits and earned about $17,000,000 in interest since inception, and without a change the district will move to pay-as-you-go funding that will increase the property tax levy. The recommended change targets Medicare-eligible retirees and is presented as a way to reduce the district's long-term liability and moderate the size of future tax increases.

District staff described the proposal as a…