TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 3, 2012
COMMITTEE ON PENSION, HUMAN RESOURCES AND CIVIL SERVICE
Mr. David St. Pierre, Executive Director
Title
Report on Retiree Drug Subsidy Program
Body
Dear Sir:
At the Board Meeting of September 8, 2005, the Board of Commissioners directed the Human Resources Department to apply for a federal subsidy available to employers offering retiree prescription drug coverage equivalent to or better than that provided by Medicare Part D. Under this program, known as the Retiree Drug Subsidy (RDS) Program, an application for the subsidy is filed with the Centers for Medicare and Medicaid Services each year and includes an actuarial attestation provided by a registered actuary that the employer's retiree prescription drug coverage meets or exceeds those provided under Medicare Part D. The value of the subsidy is directly related to actual expenditures for Medicare-eligible retiree prescription drugs.
The District's first application for the RDS subsidy included retiree prescription drug claims incurred in 2006. The subsidy payment related to this application was received on November 15, 2006. The District has submitted subsequent applications for subsidy each year from 2007 through 2012. To date, the District has received $5,703,210.82 in subsidy payments through its participation in the RDS program. A list of the annual receipts is shown below:
2006: $928,030.27
2007: $951,667.48
2008: $929,532.70
2009: $965,050.94
2010: $1,013,583.73
2011: $915,345.70
Participation in the RDS program continues to benefit the District and its retirees. By providing retiree prescription drug coverage, retirees continue to receive benefits equal to or better than those provided by Medicare Part D and, in return, the District is eligible for the annual subsidy.
Respectfully Submitted, Denice E. Korcal, Director of Human Resources