Medical Plan Changes: Much ado about nothing

IMPORTANT NOTICE

To: Pensioners in the MEBA Medical and Benefits Plan
From: Allen B. Szymczak, Administrator
Date: February 27. 2006
Re: Changes Relating to Pensioner Medical Contributions and Dependent coverage

As we previously informed you, the Board of Trustees of the MEBA Medical and Benefits Plan (“Plan”) implemented several important changes at their October 2005 meeting. Among the charges implemented in October 2005 were: increases in the minimum Pensioner medical contribution amounts payable by non-Medicare eligible Pensioners from $100 per month to $300 per month for Pensioners with no dependents and $700 for Pensioners with dependents; the determination that these minimum contribution requirements would be subject to annual COLA increases beginning on July 1, 2008; and the establishment of an $800 maximum contribution for both Medical and Non-Medicare eligible Pensioners.

In response to the comments and input received from a large number of both retired and active Participants, the Board of Trustees, at their February 2006 meeting, made the following, changes:

1. Effective retroactive to February 1, 2006, the Pensioner Medical Contribution requirement for non-Medicare eligible Pensioners with dependents has been changed to the greater of 6% of their monthly pension (calculated as a straight life annuity) or $500.00.

2. Effective February 1. 2006, all non-Medicare Pensioners may choose to drop dependent coverage. Such dropped dependent coverage may be reinstated on a one-time basis. Provided that proof of other insurance coverage for such dependent(s) while not covered by the Plan is provided to the Plan Office within 30 days of the termination of such other coverage. If such proof is not provided, the dropped dependent coverage cannot be reinstated.

3. Effective retroactive to February 1, 2006, the $800 Pensioner Medical Contribution cap that was applicable to both Medicare and non-Medicare eligible Pensioners is eliminated.

4. The annual Cost-of-Living Increases applicable to the minimum Pensioner Medical Contribution Rate that were to go into effect beginning July 1, 2008 have been eliminated.

5. Pensioners who remained in the Plan

A. Retroactive Adjustment of Pension Contributions: The changes to the Pensioners Contribution Obligations that were made at the February 2006 meetings came too late to make payment adjustments for coverage through March 2006. However, the Plan Office will make the appropriate retroactive adjustments as follows:

(i) Direct Debits: For Pensioners who have authorized the Plan to debit their bank accounts to pay for Pensioner Medical coverage, any credit due will be reflected in

(ii) Direct Deductions: For Pensioners who have authorized the Plan to deduct their Pensioner Medical Contributions from their Pension checks, any credit due will be reflected in their April 2006 pension checks.

(iii) Quarterly-In-Advance Payments: For Pensioners who have paid their Pensioner Medical Contributions quarterly in advance, any credit due will be reflected in their next quarterly billing statement issued by the Plan.

(iv) Should additional adjustments be necessary because the Pensioner chooses to drop dependent coverage, such adjustments will be made in the next following debit5 deduction or quarterly billing statement whichever is applicable.

B. Dependent Coverage; As noted in No.2, above, non-Medicare eligible Pensioners may drop dependent coverage effective February 1, 2006, but only in accordance with the following rules:

(i) Pensioners who wish to drop dependent coverage retroactive to February 1, 2006 must do so by March 31, 2006. An election form is enclosed. Provided that no benefits have been provided by the Plan for the Pensioner’s dependents for the period covering February 1. 2006 through the date such election to drop dependent coverage is received by the Plan Office; a Pensioner may elect to drop dependent coverage retroactive to February 1, 2006. If a claim for a Pensioner’s dependent is provided after the effective date of the Pensioner’s election to drop dependent coverage but before receipt of the election to drop coverage, the Pensioner will be responsible for reimbursing the Plan for any benefits provided or for the full amount of Pensioner medical contribution.

(ii) Subsequently, the Pensioner may only elect to drop dependent
coverage effective the first of the month following the month in which the election to drop dependent coverage is received by the Plan Office.


If you have any questions, please the Plan Office at (410)547-9111 or (800) 811-6322 and ask for Ten Lowry.

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