Title
Transition of Health Retirement Account to a new administrator.
History
On May 7, 2018, the Village of Orland Park Board of Trustees approved two early retirement incentive programs to encourage eligible full-time employees to retire voluntarily. These programs offered post-retirement health insurance contributions through Health Reimbursement Arrangements (HRA), funded by the Village to cover eligible healthcare expenses.
The purpose of a Health Reimbursement Arrangement (HRA) is to provide a Village funded Health Reimbursement Arrangement (HRA) to be used for after-tax health care premiums and eligible health care expenses, as outlined in Section 213(D) of the Internal Revenue Code. On June 18, 2018, the Village engaged the services of Total Administrative Services Corporation (TASC) to administer the Health Retirement Accounts.
The Village has found TASC’s administration of the plan to be difficult to navigate, burdened with higher fees that diminish retirees’ account balances, and unresponsive to the Village’s information requests. The retiree HRA accounts are fully funded, and the Village holds no future financial liability beyond its fiduciary responsibilities. Should a retiree not use the funds during their lifetime, the remaining balance will revert to the Village.
After speaking with Marsh McLennan, they put us in touch with MidAmerica Administrative and Retirement Solutions, an experienced third-party administrator (TPA) focused on benefit programs for public-sector employers. After a thorough review of administrative fees, service delivery, and long-term cost efficiencies we would like to request the Board’s approval to transition the administration of the Health Retirement Account (HRA) benefit from Total Administrative Services Corporation (TASC) to MidAmerica Administrative & Retirement Solutions, Inc.
Savings and Benefits
• Lower Administrative Fees: MidAmerica offers a more cost-effective fee structure, which will directly redu...
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