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Paynesville Press - July 4, 2001

PAHCS adopts insurance policy for early retirement

By Michael Jacobson

Paynesville Area Health Care System employees opting for early retirement now have laid-out options to continue on their health insurance. The Paynesville Area Hospital Board passed a health insurance policy for its employees to continue their insurance coverage after retiring.

The policy requires employees to be 55 or to meet the PERA rule of 90 (age plus years of experience), to have worked the equivalent of 20 years for PAHCS, and to be on PAHCS's insurance at the time of their retirement.

Based on an employee's experience and their position at PAHCS, the system will pay part of their insurance premiums until they reach the age of 65 and become eligible for Medicare. At the age of 65, employees can opt to continue on PAHCS's carrier as supplemental insurance, but will need to pay these premiums themselves.

Over 200 PAHCS employees participate in the insurance plan, system administrator Willie LaCroix told the hospital board. The need for insurance is a major concern for people as they consider retirement without having reached age 65. Some employees might retire if not for the lack of insurance, and others schedule enough hours to maintain their health insurance benefits.

"People are really concerned about it," LaCroix said.

"I think if people come work here for 20 years they deserve (this benefit)," LaCroix added.

The policy came about in part because more retirements are expected at PAHCS in the coming years. Currently, PAHCS does provide insurance for six former employees, but it has 30 employees who may retire in the next few years and can't afford to pay insurance for everyone, making the policy necessary, said LaCroix.

Another needed addition, according to LaCroix, was the cutoff date for PAHCS contributions at age 65. "I think the hospital has to have a sunset date," he told the board. "It currently doesn't have it."

PAHCS offers a good insurance plan, LaCroix told the board, with minimal co-pays of $12 for generic drugs, $20 for brand-name drugs, and $15 for clinic visits if employees get their medical care through the system.

LaCroix also told the board that he and administrative assistant Renae Nordmann are working on an insurance plan for part-time employees, which PAHCS needs to be more competitive in recruiting new employees. A plan for health insurance for part-time employees who retire could be done in the fall.

Health Insurance Policy for PAHCS Retirees
On Wednesday, June 27, the Paynesville Area Hospital Board approved a new policy for its employees to continue insurance coverage from the time they retire until they turn 65. EFFECTIVE JULY 1, 2001

(1) In order to be eligible for this benefit, employees must be at least 55 years of age or eligible for PERA full retirement or disability benefits.

(2) The employee must also have a minimum of 41,600 hours worked (2,080 hours/year x 20 years = 41,600 hours).

(3) The employee must currently be covered under the group health insurance plan.

(4) The premium paid by the facility:
50 percent for 20 years of service (41,600 hours)
52 percent for 21 years of service (43,680 hours)
54 percent for 22 years of service (45.760 hours)
56 percent for 23 years of service (47,840 hours)
58 percent for 24 years of service (49,920 hours)
60 percent for 25 years of service (52,000 hours)
62 percent for 26 years of service (54,080 hours)
64 percent for 27 years of service (56,160 hours)
66 percent for 28 years of service (58,240 hours)
68 percent for 29 years of service (60,320 hours)
70 percent for 30 years of service (62,400 hours) or more<

(5) For employees who have served 20 years as salaried personnel or department supervisors, 70 percent of the premium will be paid by the facility.

(6) At age 65, the retired employee will go on Medicare for primary coverage and the facility plan as secondary coverage if the employee chooses to keep this coverage. The entire premium for the secondary coverage will be paid by the retired employee.

(7) Physicians contracted through the Paynesville Medical Group for 20 years or more shall also be eligible for this benefit.

(8) If the employee who qualifies for this policy is deceased, the employee's spouse and dependents will be eligible to buy health insurance coverage under this plan prior to age 55. The entire premium will be paid by the employee's spouse or dependents.

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