Business Challenge

 A large Mid-Western municipality needed to change its retiree benefits program due to serious financial challenges including rising retiree health care costs and major deficits in unfunded liabilities. The municipality elected to move to a defined contribution model in a private exchange environment with a stipend to offset retiree health insurance costs. Shortly after, they were served with a lawsuit for violating the union agreement and needed to amend their benefits program once again.

After contacting AmWINS Group Benefits, the broker was able to provide the municipality with a unique retiree benefits program called Retiree Benefit Choice™ (RBC). This program offered a choice of three group plans similar to the retirees’ current options or the option to shop the Medicare marketplace. RBC helped the municipality control costs, ensured pre and post-65 retirees would have healthcare through the municipality and satisfied the union agreement.

The municipality felt RBC would meet its financial and retiree obligations better than any other available options. First year savings totaled approximately $20 million, and also resulted in a reduction in Other Post-Employment Benefits (OPEB) Liability of $300 million on their balance sheet.