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Council hears 2024 health‑care reports: OPERS, OP&F and HPRS cite HRA shifts and improved solvency metrics
Summary
Directors from OPERS, Ohio Police & Fire and HPRS reported on 2024 health-care activity, describing transitions to health reimbursement arrangements (HRA), revised allowances (OPERS pre‑Medicare $1,200; Medicare allowance raised to $400 in 2025), improved solvency, and OP&F’s assistance to members affected by the failed Thin Blue Line plan.
Directors of the state retirement systems told the Retirement Study Council on Oct. 9 that changes to retiree health‑care delivery — primarily a shift to health reimbursement arrangements (HRAs) — have reduced costs and extended solvency timelines while preserving member choice.
Director Caraher (OPERS) opened the health-care segment by saying ‘‘health care is discretionary’’ and reviewed OPERS’ shift beginning in 2015 away from sponsoring group self-insured plans toward HRAs. Caraher said that move substantially reduced OPERS’ healthcare expenses from a prior peak to last year’s $561 million and that the system now funds retiree healthcare from a separate trust supported by investment earnings rather than employer contribution dollars. She told the council OPERS’ HRA base allowance for pre‑Medicare retirees is $1,200 and the Medicare allowance was increased to $400 beginning in 2025; the report used the 12/31/2023 valuation and showed OPERS had about $12.8 billion in healthcare assets versus a $10.8 billion actuarial liability (118.6% funded ratio as of that valuation).
Director Foley (OP&F) described OP&F’s 2019 transition to HRAs and credited the change with lower costs, broader provider access in many counties and a projection that the fund’s solvency extends into the 2040s. Foley detailed OP&F’s response to the failure of the Thin Blue Line (TBL) plan: OP&F helped members obtain special enrollment when unpaid claims emerged, coordinated transitions to new coverage starting Sept. 1 after a court injunction, notified the Department of Insurance and the attorney general’s office, and has tracked roughly 967 members who had enrolled in TBL plans (more than 600 had been transitioned to new coverage by the time of the council meeting). Foley emphasized OP&F’s earlier conservative approach to its exchange and warned members about plans outside the exchange.
Director O'Rourke (HPRS) gave a brief overview of HPRS’ 2024 report, reporting that HPRS moved Medicare‑eligible retirees to an HRA in January 2022 and completed the pre‑Medicare transition in January 2024. He said the move pushed HPRS’ healthcare solvency from roughly 10 years to more than 20 years in actuarial estimates and noted positive member feedback.
Council members asked about coordination across systems, potential cooperative purchasing and the interaction of HRAs with federal subsidies. Caraher said the current stipend model makes joint purchasing less straightforward than under the old group-plan model, but she and Foley said they monitor market changes and may recommend adjustments to allowances as market conditions change.
The council received the reports; there were no council votes associated with acceptance of those reports beyond the presentation of materials.
