FRANKFORT, KY (September 24, 2018): Kentucky Retirement Systems (KRS) members’ dedication to improving their health is also improving the health of the Systems’ Insurance Trust Funds.
Through the efforts of a partnership with Humana, the Systems’ Medicare Plan administrator, healthcare costs have moderated and the quality of care has increased for KRS members. Cost efficiencies realized by these improvements are being shared with the KRS Insurance Trust. For 2017, those gains added up to more than $7.5 million coming back to KRS, where the funds are used to stabilize KRS’ Insurance Trust Plans and pay benefits for KRS members.
“The partnership between KRS, Humana and our retirees continues to provide advantages in terms of both improved health for our more than 57,000 retirees currently enrolled in a Humana Medicare Plan and improved financial strength for the insurance funds,” said Connie Pettyjohn, KRS Director of Retiree Health Care. “Our retirees have embraced the different wellness programs offered through Humana and are living longer, healthier lives, while improving the financial health of the insurance trust, and stabilizing monthly premiums. Everyone wins with this program.”
The Systems’ partnership with Humana began in 2013 when the insurer began administering Medicare plans on behalf of KRS. Previously, KRS managed a self-insured program, but five years ago decided to explore third-party options to see if further efficiencies could be achieved. Humana’s contract was renewed in 2016 following an extensive Request for Proposals (RFP) process, where other potential providers were invited to offer bids to KRS for review.
KRS members have increased their participation in Humana clinical programs by more than 31 percent since 2014. For example, over 14,000 KRS retirees are now participating in SilverSneakers, a community fitness program for older adults.
The funding status of all five of the Systems’ Insurance Trust Plans continues to improve. As of the June 30, 2017 actuarial valuation, all except the Kentucky Employees Retirement System (KERS) Non-Hazardous Insurance Plan were at least 65 percent funded while the KERS Hazardous Insurance Fund has a funded ratio of over 100 percent.
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Kentucky Retirement Systems is responsible for the investment of funds and administration of pension and health insurance benefits for over 379,000 active and retired state and local government employees, state police officers, and nonteaching staff of local school boards and regional universities.
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