Note:  Earnings (gains) in the Retirement Trust Fund for Teachers and State Employees are sufficient to pay a COLA of only 1% in 2007.  A larger COLA would require an additional appropriation, as would an increase in the formula from 1.82% to 1.83%.  For example, a 4% COLA would cost $114 million (1% from gains and 3% from appropriations), and the formula increase would require an appropriation of $47 million. These two items combined would require an increase in the State contribution rate of 1.4%, from 2.66% to 4.06%.

State Health Plan

As of July 2008 the State Comprehensive Major Medical Plan, also referred to as the Indemnity Plan, will no longer be the state recognized health plan. Instead, the new PPO will be the health plan available for state employees and retirees. If you have not changed to the PPO during one of the enrollment periods in 2007, you will receive information during the spring, 2008. If you do nothing an automatic enrollment will place you in the Standard Plan.

Following is a summary of the rate increases and benefit changes:

·        The rate increase for the 2007/2008 and 2008/2009 benefit years is in line with national trends. The premiums that members pay for their dependent coverage will increase by 11.4% for the Indemnity plan, and 11.2% for the PPO plans. This rate increase applies across all coverage tiers and will be effective October 1, 2007. With one increase for the biennium for the PPO, the average annual increase is approximately 5.6%.

·        Based on member feedback, the State Health Plan has expanded certain benefits for the PPO plans, effective July 1, 2007.  This includes enhancements to physical, occupational and speech therapies, and mental health and chemical dependency. Chiropractic benefits have also been modified and offered at a specialist copay.

·        Due to the rising cost of health care, costs for the Indemnity plan deductible and copay have increased. The Indemnity plan copay for office visits increased from $15 to $25. The individual deductible increased from $350 to $450 per benefit year, and the family deductible increased from $1050 to $1350 per benefit year. These benefit changes are effective retroactive to July 1, 2007.

·        The prescription drug plan will remain the same, except that the preferred brand with no generic equivalent tier will increase by $5, from $25 to $30 for all plans, effective August 6, 2007.

For more information about rate and benefit changes and the special fall enrollment, please visit the State Health Plan Web site at www.shpnc.org.

You can also click on Trifold.pdf to see a brief outline of the three Preferred Provider Plans.

Indemnity plan members may call 1-800-422-4658.  PPO plan members, please call 1-888-234-2416 for questions related to health benefits. Members with pharmacy questions may call 1-800-336-5933.

Funds Expended for NCRSP Lobbying

We believe that our members are fully aware of the importance of lobbying in improving the welfare and security of retired school personnel.  Suffice it to say that lobbying has played and is playing a major role in bringing to retired school personnel throughout the state COLAs, formula adjustments, and health care benefits.  During the past thirty years, retirement benefits have increased an estimated 150%, due in large part to the payment of COLAs and formula adjustments.  In the past 24 years, there has been only one year (1991) when no COLA was paid, and lobbying has played no small role in this achievement. 

Dr. Lacy Presnell and Pam Deardorff are our two lobbyists in the General Assembly, and they are doing a superlative job.  In 2005-2006, 17.37% of NCRSP membership dues went to lobbying.  From $238,725.43 in membership dues, funds expended for lobbying totaled $41,465.70.  This includes honoraria for the lobbyists, travel, supplies, promotion, and Legislative Committee expenses.  We believe that the return for this investment, as well as previous investments for this purpose, demonstrates that the funds have been well spent.

Legislative Committee