FRANKFORT, KY – The Kentucky Public Pensions Authority (KPPA) announced today that it will receive a total refund of $18.3 million from Humana, the Authority’s Medicare Plan administrator, in recognition of lower-than-expected healthcare costs incurred during 2020.
KPPA, formerly known as Kentucky Retirement Systems, manages all daily activities, including administrative support, investment management, benefits counseling, and retiree healthcare for the County Employees Retirement System (CERS), Kentucky Employees Retirement System (KERS), and State Police Retirement System (SPRS).
The COVID-19 pandemic has reduced the typical number of non-urgent medical services performed by healthcare providers. In addition, CERS, KERS, and SPRS retirees have embraced the different wellness programs offered through Humana and are living longer, healthier lives, resulting in lower healthcare costs for both Humana and the insurance trust. Together, these cost efficiencies create savings that are shared between KPPA and Humana in accordance with the terms of the Authority’s contract with the insurance provider.
“As the administrator of the KPPA health plan, Humana is pleased to partner with the Authority to improve the health and wellbeing of its retiree members while efficiently managing overall healthcare costs,” said Tim Snyder, Humana’s Group Medicare Senior Vice President. “While the pandemic caused lower-than-expected healthcare utilization in 2020 that resulted in this refund, we remain focused on ensuring every KPPA member has safe and ready access to the care and support they need.”
The financial strength of all five Insurance Funds continues to improve. As of the June 30, 2020 actuarial valuation, all except the Kentucky Employees Retirement System (KERS) Nonhazardous Insurance Fund were at least 70 percent funded while the KERS Hazardous Insurance Fund has a funded ratio of over 100 percent.
“With the receipt of the 2020 $18.3 million in refunds as a result of claims being less than expected, KPPA has now received more than $68 million refunds since 2017,” said David Eager, Executive Director of the Kentucky Public Pensions Authority. “Our retirees deserve a lot of credit for making this happen through their health consciousness.”
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The Kentucky Public Pensions Authority is responsible for the investment of funds and administration of pension and health insurance benefits for over 401,000 active and retired state and local government employees, state police officers, and nonteaching staff of local school boards and regional universities.
Visit our website at https://kyret.ky.gov