The move to extend the solvency of the health-care fund for retired Ohio police officers and firefighters has left some retirees feeling queasy.
The board of the Ohio Police and Fire Pension Fund acted earlier this year to shift from a self-insured group policy to providing a monthly stipend to allow retirees to buy their own health insurance beginning in 2019.
The change is projected to reduce the fund’s costs by $25 million, to $108 million next year, with projected savings increasing the life span of the near-$900 million fund from nine years to 15 years.
But the coming change has not been without problems for some former first-responders, led by complaints about the performance of London-based Aon, the company hired to help retirees find and buy insurance policies.
Some retirees also have complained about a lack of insurance providers in some counties, while some believe that the fixed stipend for retirees younger than 65 and not yet covered by Medicare is inadequate.
“Non-Medicare people, in particular, are running into every imaginable problem from cost to coverage to logistics,” said Michael Taylor, president of the Ohio Association of Professional Fire Fighters.
“Aon has failed miserably” in helping pension-fund retirees find appropriate private insurance and Medicare supplemental policies, Taylor said, adding that pension officials are “doing what they can” to insist Aon step up its game.
Taylor unsuccessfully lobbied last month for the pension fund to postpone the change, writing its “implementation has been sloppy and haphazard.”
Pension fund spokesman David Graham acknowledged concerns over Aon, but said there is confidence that many problems have been resolved with the addition of more advisers to help retirees. An Aon spokeswoman also noted the addition of more employees devoted to working with Ohio retirees, adding, “We are continuing to work closely with pension fund members.”
A retiree and spouse on Medicare will receive $346 a month for supplemental coverage; a retired couple not yet age 65 will receive $1,074 monthly to buy a health-care policy.
There are about 18,000 pension fund beneficiaries on Medicare and 7,800 younger retirees must buy individual policies. About 8,800 retirees are covered by other insurance, such as through their spouse’s policy.
Other non-Medicare insurance complaints have included the lack of an insurer in Tuscarawas County, only one provider in Franklin County, and Stark County’s offerings not including Aultman Hospital, the county’s largest health-care provider, Taylor said.
“We expect that the Aon exchange has at least one plan available to our retirees in every county in Ohio, but OPF does not control the exchange. If there is no plan available in the retirees’ area, they may purchase a health-care plan from the federal exchange and still receive stipend support,” Graham said.
Fraternal Order of Police Ohio President Gary Wolske said, “Many of our members have been frustrated with the lack of responsiveness” by Aon, “which is why we’re appreciative that the pension fund leaders have been pushing hard to get those problems resolved.”
Including the health-care fund, the portfolio of the Ohio Police and Fire Pension Fund exceeds $15 billion and meets state funding standards. The fund covers local police and firefighters, but employees from Ohio’s sheriff’s offices and some other law-enforcement officers are covered by the Ohio Public Employees Retirement System.
Police and firefighters with 25 years of service are eligible to retire beginning at age 48 at 60 percent of the average of their five highest years of earnings. The average annual pension is just shy of $47,000. As beneficiaries of a public pension fund, retirees do not receive Social Security benefits.