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Upcoming Changes to Retiree Coverage, Subsidies and Rhra

After reviewing the cost-effectiveness of offering health coverage to retirees, the Board of Trustees has determined that most retirees can obtain better benefits at a lower cost by purchasing coverage from the health insurance marketplace. The Northwest Carpenters Health and Security Plan will discontinue Retiree Coverage for Medicare-eligible participants and dependents effective August 31, 2024. Retiree Coverage for pre-Medicare participants and dependents will be terminated effective December 31, 2024.

Prior to discontinuation of Retiree Coverage, certain subsidies and a Retiree Health Reimbursement Account (RHRA) were available to lower the monthly cost of coverage for some retirees. Those programs will be changed as follows:

If you are a Medicare-eligible participant or dependent — all subsidies and RHRA balances will expire August 31, 2024. The cost of supplemental Medicare coverage will not be deducted from monthly retirement payments after July 1, 2024 (or August 1, 2024, for Oregon-Southwest Washington retirees). In most cases, replacement coverage purchased from the insurance marketplace will be more affordable, even without the subsidy.

If you are a pre-Medicare participant or dependent — your current subsidies and RHRA balances will remain in place through December 31, 2024. The cost of Retiree Coverage will not be deducted from monthly retirement payments after November 1, 2024 (or December 1, 2024, for Oregon-Southwest Washington Retirees).

On January 1, 2025, the current subsidies and RHRA balances will be replaced with a limited health reimbursement account (HRA). The new HRA will reimburse qualified individuals up to $500 per month per person (participant or dependent) after receiving proof of premium payment for coverage purchased from the public marketplace. To be eligible for an HRA premium reimbursement, participants or dependents must:

  1. Receive a monthly benefit or lump sum benefit from the Northwest Carpenters Retirement Plan, the Washington, Idaho, Montana, Carpenters-Employers Retirement Plan, or the Cement Masons and Plasterers Retirement Plan; and
  2. Worked at least 7,500 hours for which employer contributions were received by the Northwest Carpenters Health and Security Plan or the Oregon-Washington Carpenters-Employers Health and Welfare Plan during the 120 months immediately prior to the participant's retirement effective date.

The HRA premium reimbursement program will be subject to these rules:

  • Reimbursements will be limited to the purchase of health insurance from the marketplace. Proof of premium payment is required.
  • Premium reimbursements will only be available to pre-Medicare participants and dependents.
  • Premium reimbursements will end December 31, 2030, or earlier if:
    • A retired participant or dependent receives 36 months of reimbursements after January 1, 2025; or
    • A retired participant or dependent attains Medicare eligibility, even with less than 36 months of premium reimbursements.
  • If an individual chooses to take a federal subsidy, such as a premium tax credit, in lieu of HRA reimbursement but returns to the HRA program prior to exhausting 36 months of eligibility, the individual may reenroll in the HRA program for the remaining months. Individuals will be limited to 36 months of combined premium reimbursements, federal subsidies and tax credits.

The HRA premium reimbursement program will be administered by Carpenters Southwest Administrative Corporation. If you have any questions about these changes, contact Participant Services at (800) 552-0635 or ps@carpenterstrusts.org