ARTA Retiree Benefits Plan Self-Administration – Financial Implications
In September, ARTA announced that it will be self-administering its Retiree Benefits Plan, effective January 1, 2021. This means that ASEBP will no longer be providing these services on ARTA’s behalf, and the fees paid to ASEBP will instead be retained by ARTA. Thank you for all the valuable feedback and questions received over the past month.
This month, we are explaining in more detail the financial implications to self-administration, using questions we have received from ARTA members.
1. Is ARTA saving money? Where will that money go?
In the long term, yes, ARTA will be saving money. A conservative cost analysis on the move to self-administration forecasts that ARTA will save approximately $5.8 million over a four-year period compared to current costs. While there will be a negative variance in 2020 due to considerable start-up costs, the anticipated savings in expenses will be positive in 2021, with ARTA in a positive overall position by the end of 2022, and each year moving forward.
As ARTA is a not-for-profit association created by teachers, for teachers and like-minded professionals, all of the anticipated revenue will be re-invested in the Retiree Benefits Plan. This will result in plan improvements, sustainable and affordable premiums, or a combination of the two as determined by ARTA’s Health Benefits Committee and Board of Directors.
2. Were there alternatives to self-administration, and how much did they cost?
ARTA considered several alternatives to self-administration and presented these to the Board of Directors; ultimately, the option that was most cost-effective and increased the sustainability of the Retiree Benefits Plan was the option to self-administer the Retiree Benefits Plan.
3. Will there be an increase in premiums because of this change?
There will not be an increase in premiums because of the change to self-administration. As was stated in the Benefits Renewal package you received in the mail in September, there was a decrease to your monthly premiums effective November 1, 2020, due to lower overall claims experience over the past year. ARTA is pleased to continually offer Benefits plan improvements to our members while maintaining rates.
4. What will happen to my monthly benefits premiums?
Your premium payments and claims reimbursements will continue to be handled in the same manner that they are now – through direct withdrawal on the tenth day of each month and claims reimbursements will continue to deposited directly into your account.
The only difference is that your bank statements will no longer read “ASEBP” for your monthly premium withdrawals and claim reimbursements. Instead, your bank statements will read “ARTA Benefits”.
We hope that clarifies some of the key financial questions that have been asked. If you have any additional questions, please refer to our Self-administration Page for all of the information as well as frequently asked questions, or submit additional questions to email@example.com.