NCRGEA urges you to let North Carolina Department of Insurance Commissioner Mike Causey know your comments concerning the North Carolina Rate Bureau asking for an average statewide increase in homeowners’ insurance rates of 42.4%, with some rates as high as 99.4%. To see a specific table of proposed homeowners’ rate increases across the state, please click here.
You can provide your comments four ways:
A public comment forum will be held to listen to public input on the North Carolina Rate Bureau’s rate increase request at the North Carolina Department of Insurance’s Jim Long Hearing Room on Jan. 22, 2024 from 10 a.m. to 4:30 p.m. The Jim Long Hearing Room is in the Albemarle Building, 325 N. Salisbury St., Raleigh, N.C. 27603.
Written public comments must be received by Kimberly W. Pearce, Paralegal III, by Feb. 2, 2024 and addressed to 1201 Mail Service Center, Raleigh, N.C. 27699-1201.
All public comments will be shared with the North Carolina Rate Bureau. If Department of Insurance officials do not agree with the requested rates, the rates will either be denied or negotiated with the North Carolina Rate Bureau. If a settlement cannot be reached within 50 days, the Commissioner will call for a hearing.
The North Carolina Rate Bureau represents companies that write insurance policies in the state and is a separate entity from the North Carolina Department of Insurance.
This rate filing follows the homeowners’ insurance rate filing that the Department of Insurance received from the North Carolina Rate Bureau in November 2020, where the Rate Bureau requested an overall average increase of 24.5%. That filing resulted in a settlement between Commissioner Causey and the Rate Bureau for an overall average rate increase of 7.9%.
The Rate Bureau has asked for the rates to become effective Aug. 1, 2024.
Rate increases affect everyone living in North Carolina; either directly for homeowners, or in increased rents as landlords pass the cost to renters. Don’t think that someone else will speak for you. Take action and let Commissioner Causey know how this will affect you.
NCRGEA’s Local Outreach was back on the road in September and October, and we held seven meetings throughout the state to provide information about open enrollment. As you all know, this is a very busy and sometimes confusing time with questions about medical, dental, and vision plans. Our goal was to provide members with helpful resources they may need to navigate the process.
Our meetings included representatives from Seniors’ Health Insurance Information Program (SHIIP), Humana, and our partner, AMBA. We value these relationships and the help they provide to the retirees in our state. All who attended said they learned something beneficial and enjoyed the meetings.
Please plan to attend future events, and be on the lookout for all the ways we communicate upcoming meetings:
Online (www.rgea.info) and phone (919-834-4652) registration options
Email reminders for those who register
Our next meetings will be held in the spring of 2024 at a location near you. Check out the January edition of Living Power for dates, times, and locations, or go to our website for meeting details and how to register. You can also reach out if you have a group of state or local retirees and would like us to plan a meeting in your area. We’d be happy to arrange one!
A new state law related to the pensions of two of North Carolina’s largest health systems has stirred up controversy among stakeholders across the region.
The new law, called the Transformational Investments in NC Health, was created for UNC Health and ECU Health. UNC Health and ECU Health are the regional healthcare systems based at The University of North Carolina at Chapel Hill and East Carolina University in Greenville. Both are state agencies.
The law prohibits new employees at UNC Health and ECU Health from participating in the traditional state retirement program—a system that guarantees retired state employees an income for the rest of their lives after they retire. Instead, new employees at UNC Health and ECU Health would enroll in an investment program to save for retirement, but that program doesn’t guarantee a post-retirement lifetime income.
The Transformational Investments in NC Health law was part of the state’s 2023–2025 biennial budget, which the General Assembly approved in September. The law allocates $420 million to UNC Health and ECU Health for the NC Care initiative. The initiative is for health clinic and hospital construction and other medical services for rural areas of eastern North Carolina.
According to the office of State Senate President Pro Tem Phil Berger, some of the $420 million for NC Care is coming from the $1.6 billion “sign-on bonus” that North Carolina is getting from the federal government for expanding Medicaid health insurance to several hundred thousand uninsured lower-income North Carolinians. Funding for NC Care also comes from the State Capital and Infrastructure Fund, a fund the legislature established to pay for public infrastructure and facilities.
But State Treasurer Dale Folwell says this law threatens the stability and long-term health of the pension plan for retired state employees and future retirees. “This is a torpedo to the pension system,” he says. He believes the law also would drive up the price of providing health insurance benefits for state employees, and the costs could be transferred to the employees through their premiums or to North Carolina taxpayers.
Folwell estimated the liabilities to the pension and state health benefits systems could exceed $1.5 billion. The new law could have the collateral damage of putting increased income taxes on state employees by canceling the tax-deferred status of their retirement contributions, according to Folwell. His office oversees the state pension system and the state health plan medical insurance benefits system.
Critical Choices
The normal pension offered to state employees is the Teachers’ and State Employees’ Retirement System. But there also is an optional retirement program for employees of the University of North Carolina System, which includes all the state universities and UNC Health and ECU Health hospital systems. While the state treasurer’s office oversees the traditional pension program, the UNC System manages the optional retirement program. Employees of those health systems may participate in either retirement program.
In the Teachers’ and State Employees’ Retirement System, employees put in 6% of their salaries (and this money is tax-deferred, so it reduces the employee’s taxable income). The employing agency also contributes. The treasurer’s office invests the money, and when the employee retires, he or she will get a monthly payment based on how long they worked and the average of their highest four years of salary, a state retirement document says. Approximately 85% of a retiree’s benefits from the pension are derived from their own contributions and earnings.
“More than 90% of those who make less than $40,000 a year choose the retirement plan because it provides them with the certainty that they need when they don’t have the income to be retirement-ready on their own,” Folwell says. Among university employees earning more than $100,000, 58% choose the pension plan, and 42% choose the investment plan, says Patrick Kinlaw, the director of policy, planning, and compliance for the Retirement Systems Division at the treasurer’s office.
People who would like more control of their retirement planning can use the Optional Retirement Program, according to a guide published by the UNC System. As with the normal plan, employees put in 6% of their income (tax-deferred). Employees can direct the money to various mutual funds and other investment tools.
Folwell says the optional retirement program can be more attractive to employees with higher incomes. Regardless of whether the employees choose the standard or the optional retirement program, the state already offers all of them supplemental investment options to help increase their retirement nest eggs.
According to the Retirement Systems Division at the treasurer’s office, as of December 2022 there were 298,000 state employees contributing to the Teachers’ and State Employees’ Retirement System, and 21,000 in the UNC optional retirement program.
The treasurer’s office says that if UNC Health or ECU Health produce a new retirement program that allows employees to put in an amount other than 6% of their income (for example, 4%), the Internal Revenue Service could cancel the tax break that the employees receive on their retirement contributions.
The tax break on the retirement contribution reduces the employees’ taxable income. If an employee had a $50,000 salary, the 6% contribution is $3,000 and lowers the taxable income to $47,000.
The IRS requires the retirement contributions offered to the employees to all be the same percentage, according to the treasurer’s office. If UNC Health offers existing employees both the current 6% program plus a new 4% contribution program, the IRS could revoke the tax break for everyone.
The Big Picture
Dan Doonan of the National Institute on Retirement Security says employers in the public and private sector sometimes withdraw from their pension plans, and there are three concerns when that happens.
First, when UNC Health and ECU Health reduce their participation in the retirement system by excluding new employees, the agencies’ share of payments going into the retirement system will decline more quickly than the amount retirees drawing pensions from the plan are paid.
“What that means is, with any unfunded liabilities, there’s going to be a cost shift to the rest of the employers still in the system,” Doonan says. In this case, the other tax-funded state agencies.
Second, after the employer departs from a pension program, the risks involved in running the pension plan will be more concentrated on the remaining employers and employees. “If you have a Great Recession-type event, the employers who leave aren’t going to be there to help get things back on track,” Doonan says.
The third concern, according to Doonan, is ending up with a pension fund with more retirees and fewer workers.
“And when you look at private sector multi-employer plans that have struggled—and particularly coming out of the Great Recession—they tend to be the ones that had a lot of retirees and few workers,” he says. “Because there’s no way to get back on track if you start to get really retiree-heavy.”
When an employer or state agency exits a pension plan, it normally makes a payment to the pension plan to cover the financial liabilities it leaves behind for its employees who have been in the system.
That’s not happening with UNC Health and ECU Health, according to Folwell. “It’s a divorce where one party leaves the family and doesn’t pay the liabilities and debts they’ve left behind,” he says. Fowell estimates the health systems would have to pay more than $1 billion to make the state health plan whole, and more than $500 million to make the pension plan whole.
A study that Doonan and Tyler Bond of the National Institute on Retirement Security published in 2019 looked at what happened when pensions were shut down for state workers in several states.
When Alaska shut down its pension for state employees and teachers in 2005, it still owed pensions to workers who had already been in the system, the report found. Those costs grew into the billions. Meanwhile, after the pensions were eliminated, the state had trouble recruiting teachers, state troopers and other public employees. And people retiring without a traditional pension were more likely to suffer financial hardship.
The Alaska Beacon reported this past February that Alaska was considering reviving its pensions for state employees. It said a state study found that Alaskan government retirees relying on investment-based retirement programs were getting significantly less income than they would have if Alaska had not done away with its pensions.
Elsewhere, Michigan cut off new employees from pension eligibility in 1997. The burden on taxpayers grew to pay the retirements to the workers that had been in the system. And workers in the new, non-pension 401(k) were projected to receive only $300 per month on average, vs. $1,849 under the old pension plan, the study found.
Differing Opinions
But the two health systems say Folwell’s dire predictions for the retirement system and state health plan are wrong.
“ECU Health does not anticipate these changes will negatively impact the state of North Carolina,” ECU Health says in a statement. As of early November, details about the new retirement programs for UNC Health and ECU Health were unavailable.
In a statement to Living Power, UNC Health also defended the Transformational Investments in NC health law.
“These new benefits will mirror what other similarly sized health care systems in the state offer their employees,” says Alan Wolf, a spokesman for UNC Health. “That will allow UNC Health to better compete with the private sector on hiring and retaining employees by allowing for new retirement benefits, outside the ones normally offered by the state.”
The law also allows UNC Health to let existing employees switch to the new benefits plans, although there are no current plans to do so. “That is a new policy we could consider offering, but we are not obligated to do so,” Wolf says.
ECU Health says it “does not anticipate any impacts to existing state employees” based on its participation in the new law’s benefits programs. Of the 14,000 people at ECU Health, only 1,200 are state employees. The rest are private-sector employees operating under ECU Health and do not participate in the State Health Plan or state retirement system.
UNC Health has 30,000 people, with 13,500 state employees and 16,500 private sector employees, according to Wolf.
But NCRGEA executive director Tim O’Connell shares concern with this new law. He believes it will increase costs over time to these healthcare entities, those seeking healthcare, and even the taxpayers.
“There is some great empirical research highlighting the fact that defined benefit plans like a pension are nearly twice as efficient as defined contribution plans,” O’Connell says. “Pensions plans have distinct advantages by design with longevity pooling, portfolio diversification, and lower management fees. If these two state healthcare systems do away with the current pension and health benefits, they will either need to absorb these higher personnel costs that are then passed on to patients or reduce the employee benefits. Neither are great options.”
You may be familiar with a few personal itemized deductions to help reduce your tax bill, but maybe you’re not as familiar with “tax credits.” Here are four categories of tax credits that may help you find more than pennies under your couch cushions.
Refundable vs. nonrefundable credits Taxpayers whose tax bill is less than the amount of a refundable credit can get the difference back in their refund. However, once your liability is zero, you won’t get any leftover amount back as a refund for nonrefundable tax credits. In other words, the taxpayer gets a refund only up to the amount owed.
Earned Income Tax Credit A refundable tax credit for moderate- and low-income taxpayers with or without qualifying children is the Earned Income Tax Credit. Special rules apply to military members, clergy members, and those with disabilities. Visit the IRS’ EITC Assistant webpage to learn whether you’re eligible.
Energy efficient property credit Earn more green when you go green! This allows for a credit equal to the applicable percent of the cost of qualified property such as solar electric property, solar water heaters, geothermal heat pumps, small wind turbines, and fuel cell property. Various limitations and applicable percentages are found on the IRS’ Energy Incentives for Individuals webpage.
Electric vehicle tax credits Do you have the drive for this tax credit? You may qualify for a credit of up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The credit is available to individuals and their businesses. To qualify, you must buy the vehicle for your own use and use it primarily in the U.S. Income restrictions apply, so check with your tax or financial professional for details.
Don’t leave money on the table! No matter your stage in life, there are ways to affect your tax bill. For more money tips, visit the You+ Money Blog at civicfcu.org.
After spending time in the hospital, eating balanced, nutritious meals may make a difference in your recovery and your overall health. The Humana Well Dine® program provides 28 meals after an inpatient stay in a hospital or nursing facility. That’s why Humana has teamed up with Mom’s Meals® to deliver nutritious, tasty meals right to your home when you need them most—at no additional cost to you.
Mom’s Meals, a leading provider of home delivered meals nationwide, offers a variety of nutritional and condition-specific meals delivered to the homes of Humana’s eligible members as part of their Medicare Advantage Individual, Group, and Medicare Supplement plans throughout North Carolina. Humana is providing the meals to eligible members as part of their benefit plan and at no additional cost.
Studies consistently show that medically tailored meals support patient recovery after hospitalization and reduce instances of readmission, as well as help patients manage chronic conditions, avoid hospitalizations, and preserve health and independence. Programs implemented through Mom’s Meals have seen up to 80% reduction in inpatient stays 30 days after discharge, and over a 40% reduction in visits to the Emergency Department 30 days post-discharge.
Humana eligible members can receive 28 fully prepared meals made with high-quality ingredients, packed in coolers with gel bags and delivered directly to their home. The menus are designed by dietitians, offering something for everyone, including diabetic-friendly, gluten-free, heart friendly options, as many others. The tasty meals that are ready to heat and eat and last for 14 days in the refrigerator.
“We know nutritious food has a strong impact on overall health,” said Mike Anderson, the president of Mom’s Meals. “We look forward to helping Humana’s members recover after a hospital stay, avoid readmission, and manage chronic conditions – all in the comfort of their own homes.”
To find out more about your Humana Well Dine meal benefit, call the number on the back of your Humana member ID card.
Even in our retired years, New Year’s Eve comes with a lot of expectations and pressure to have a wonderful and memorable night. NCRGEA asks you to please keep the following tips in mind while making plans for your celebrations.
1) Don’t drink and drive! It’s not only a safety hazard, it’s illegal! It has been said many times, but you can never say it enough. If you plan on going out for New Year’s Eve, designate a sober driver, take a ridesharing company or cab, plan to sleep over at the host’s home, or arrange for a sober driver to pick you up.
2) Plan for guests’ safety. If hosting a party, plan a way to have guests get home safely or have a place for them to sleep over if they don’t have a sober driver.
3) Consider pet safety. Animals get frightened around loud noises, especially fireworks. Keeping your pets inside can help avoid these issues. Make sure any pet that has a chance to get outside is properly tagged.
4) Try not to leave your car overnight. New Year’s Day is the second most active holiday for car theft. If you must leave your car, make sure it is locked and try to pick it up as early as you can the next day.
5) Be mindful at public events. Try not to travel alone; make sure you have a cell phone on you, and be aware of your surroundings. Many criminals consider retired citizens as easy targets.
6) Avoid using fireworks or flare guns without understanding local laws and safety rules.
NCRGEA hopes you enjoy your celebrations and we want you to be as safe as possible. Stay safe, stay smart, and make this New Year’s Eve unforgettable for the right reasons!
By Treasurer Dale R. Folwell, CPA, LivingPower Newsletter Nov/Dec 2023
Department of State Treasurer (DST) focuses on loyalty and duty-of-care for public servants like you who teach, protect or otherwise serve the citizens of North Carolina. This is what drives DST and the North Carolina Retirement Systems (NCRS) to fulfill their mission to protect and preserve the state’s pension system and health care plans, while reducing fees and maximizing value.
Though we have had to navigate some uncharted waters over the last few years with stock market volatility and COVID, NCRS has been consistently in the check-delivery business. At our very core, we ensure benefits due to members are delivered as promised and on time, and that members and their families who are impacted by a life event are taken care of in a timely, efficient manner. I want to recognize our staff that works diligently with a member-first mentality to not only get business done but listen to what is needed to do good business.
Over the last year we launched a new phone system that allows easier access to information through an automated, self-service phone menu. Over 30% of members calling in now find what they need, on their own, through this system. Those that need to speak to a retirement counselor are holding on the line less than two minutes on average. Chat was recently implemented in ORBIT as an additional way to get the information you need. Users who participated in the soft launch of this service have given it a nearly perfect rating. We realize every member’s situation is different, so our counselors are dedicated to taking the time you need to provide value and service.
Recent legislation has brought positive changes impacting NCRS. Members with a retirement date on or after January 1, 2024, will see their first benefit payment made by direct deposit. Traditionally, a retiree’s first payment has been sent by paper check. New retirees will be able to lock in their retirement options earlier and NCRS will be able operate more efficiently as we continue to see record numbers of retirements each month.
For the second time in as many years, the state will pay a one-time supplement for benefit recipients who retired on or before October 1, 2023, are living as of October 1, 2023, and are members of the Teachers’ and State Employees’ Retirement System, Consolidated Judicial Retirement System, and the Legislative Retirement System. This one-time supplement will be issued on or before November 30 and is equal to 4% of the annual retirement allowance, where the annual retirement allowance is 12 times the monthly allowance payable for October 2023.
These funds did not come from the Plan itself and were appropriated by the General Assembly as a part of the budget passed on October 3, 2023. This does not apply to benefit recipients of the Local Governmental Employees’ Retirement System (LGERS), where a benefit increase may be granted by the LGERS Board of Trustees within certain statutory limitations.
Whether you are planning for or in retirement, there has been a seismic shift in this life phase. People are living longer, and this requires a revised budget strategy for income, expenses, and health care costs. The fact is you have a solid foundation in retirement with your monthly pension benefit and this should serve as your motivation. The NC Pension is widely regarded as one of the most secure and best-funded pensions in the United States. Additional savings in the NC 401(k) and NC 457 Plans, coupled with Social Security Income and outside assets, will also help in meeting a gap in retirement income. Each of you has navigated a change towards retirement and I encourage you to talk with someone younger than you to share your lessons learned.
The ancient Greek philosopher Heraclitus wrote that “no man ever steps in the same river twice, for it’s not the same river and he’s not the same man.” As we move to a new year, I wish each of you success in health and purpose and thank you for your service to the citizens of North Carolina.
Army General James Van Fleet once said, “I’m always willing to accept change, as long as it isn’t change for the sake of change. If that change will result in a better way of doing things, then I’m all for it.” NCRGEA feels confident he would have agreed with the changes coming to Living Power.
Starting in January, Living Power has a completely new look and feel with a different publishing schedule — in its new quarterly magazine format. While continuing to keep members informed on matters that are important to them, Living Power will have more in-depth articles, more photographs, and a more user-friendly layout.
“The new magazine will provide us with a great format for telling the story of the positive impact that those who have worked in local and state government continue to have on North Carolina and our economy,” said Tim O’Connell, NCRGEA Executive Director. “It will allow us to better inform our members, recent retirees, and lawmakers on the ins and outs of pensions and healthcare plans.”
He added, “In addition, the magazine will allow us to present information in a more visually appealing format and provide content that complements our digital communications.”
In her role as Community Liaison at NCRGEA, Deryl Davis-Fulmer focuses on the many ways NCRGEA members are active in their local communities and in state-wide organizations. Regarding the new magazine, she is excited about the opportunity it provides to “shine a light on their accomplishments and maybe inspire others to get involved with their communities.”
Current feature columns along with new content enabled by the expanded format include:
NCRGEA Executive Director and Board of Directors President columns
State Treasurer’s column
Contributions from various Council of State members
NCRGEA member profiles
District Community Connections column
Calendar of upcoming NCRGEA events
Puzzles and games that will provide opportunities to engage and win prizes
To complement the new quarterly schedule of the magazine, other communications channels including social media, email, and the NCRGEA website, will be used to provide late-breaking news and timely information to members. The magazine will be available in both print and digital formats, so look for the print version to arrive in the mail and sign up for the digital version if you have not already done so. The digital magazine can be accessed via email or on our website.
Look for these exciting changes to Living Power coming in January and be sure to read to stay informed about all the ways that NCRGEA is advocating for and informing you. Get ready for change — not for the sake of change, but for a better way of doing things!
This Forbes article warns of the threat to the stability of the Teachers’ and State Employees’ Retirement System and State Health Plan with 2024 budget provision. The provision will make new UNC Health and East Carolina University Health employees ineligible for the state pension plan beginning January 1, 2024.
The decision to no longer extend State pension and health plan benefits to new employees of UNC Healthcare and ECU Health is detrimental to all North Carolinians.
NCRGEA will continue to work with elected officials to move to a more fiscally sound solution to protect the pension and health plans so as not to increase the risk of retirement insecurity among healthcare workers and their retirees, especially its lowest-paid.
