SB 1778 would change the statutes governing the San Antonio Fire and Police Retiree Health Plan. The bill would increase the contribution rates to the fund by the city of San Antonio, as well as increase the dollar amount of contributions to the fund by the firefighters and policemen. The proposal also changes the maximum deductible per person in a calendar year from $200 to $500 beginning January 1, 2008. The maximum deductible and maximum out-of-pocket payments would each increase annually according to changes in the total medical care consumer price index beginning January 1, 2013, but not to exceed 8% in any one year. For the years starting January 1, 2009 through December 31, 2012, the maximum out-of-pocket payments per person in a calendar year would increase by an additional $100 per year. In order to provide an incentive to use the discounted services of network providers, the bill would add in-network incentives for health care service that would increase the cost of using out-of-network providers. Additionally, contributions would be required of future retirees who retire with less than 30 years of service equal to what the contributions would have been had they continued employment to 30 years.

The bill, if enacted, would increase both city and employee contributions to the plan and result in reductions in benefits. Thus, the proposal would have a positive actuarial impact on the plan. Since the plan is a post-retirement health care benefit plan, and not a pension or retirement income plan, it is not within the purview of the Pension Review Board (PRB). Therefore, the PRB is unable to perform an actuarial review of the bill. The bill does not propose to change the funding or obligations of any public retirement system.

SOURCES:

Actuarial Analysis by Robert M. May, Actuary, Rudd and Wisdom, Inc., March 26, 2007