2021 Non-Medicare Subsidy Increase
The new approved amount for the non-Medicare health subsidy maximum is $1,958.82 per month, effective July 1, 2021.
On April 1, 2021, the Board of Fire and Police Pension Commissioners approved a two percent increase to the non-Medicare health subsidy. With the increase to the non-Medicare health subsidy, the vast majority of pre-65 members will see a reduction in premiums and potentially experience lower out-of-pocket costs. In fact, the maximum subsidy will fully subsidize all LAFRA or LAPRA single-party and two-party non-Medicare plan premiums for members with a non-frozen subsidy and at least 25 years of service.
Each year, the Board has the authority to increase the non-Medicare subsidy by up to the lesser of 7% or the actuarial medical trend rate for the upcoming fiscal year. The non-Medicare actuarial medical trend rate for fiscal year 2021-2022 is 4.75%, therefore the Board had the authority to increase the subsidy by up to 4.75% this year. The approved 2% increase is consistent with the Board’s fiduciary duty to all members. The Board considered the following information that would potentially affect members:
- Impact to out-of-pocket premium costs for non-Medicare subsidy eligible retirees;
- Impact to retirees in multi-party Medicare plans; and
- Average premium changes among most eligible plans.
Do I qualify to receive the non-Medicare subsidy?
The actual increase in subsidy benefit per member is dependent upon eligibility and the retiree’s respective health plan premium. The approved increase to the maximum non-Medicare subsidy provides fully subsidized single- and two-party coverage for all eligible pensioners with 25+ years of service. Qualified survivors who are under the age of 65 and pensioners who are enrolled in a Board-approved HMO or PPO single-party Medicare health plan are not impacted by the maximum non-Medicare subsidy increase.
If you have questions or need more information regarding the non-Medicare Health Subsidy increase, please contact Medical & Dental Benefits at (213) 279-3115.