Cash Basis Other Postemployment Benefits (OPEB)
Information regarding BARS GAAP Other Postemployment Benefits can be found in the BARS GAAP Section 3.4.17 Other Postemployment Benefits (OPEB). The information below is for BARS Cash Basis local governments:
- Office of the State Actuary – OPEB webpage
- OPEB Cash BARS Section
- OPEB Cash BARS Note Disclosures
- Schedule 09 – Liabilities
Other Postemployment Benefits (OPEB) – Cash Basis
Beginning with the 2019 annual report to the SAO, cash basis local governments will report their OPEB liabilities on Schedule 09.
What is OPEB?
Other Postemployment Benefits (OPEB) = postemployment benefits other than pensions. This includes:
- Postemployment healthcare benefits (medical, dental, vision, hearing, etc.) – whether provided through a pension plan or separately;
- Other benefits (death benefits, disability, life insurance, long-term care, etc.) – when provided separately from a pension plan.
Do I provide OPEB?
The most common OPEB benefits provided by local governments are:
- PEBB – Participating employers in the state’s Public Employees Benefits Board (PEBB) plan provide OPEB through the plan’s implicit and explicit rate subsidies for retirees.
- LEOFF 1 – Under state law, employers are obligated for lifetime medical expenses of their LEOFF 1 retirees.
If you provide OPEB through any other plans or are uncertain about whether or not an arrangement qualifies as OPEB, please contact the SAO HelpDesk.
What is an “implicit rate subsidy?”
This is also known as a “blended premium rate.” It is caused by the inclusion of retirees in the same cost pool as active employees. As a result, retirees have the same premium rates as active employees and the rates for active employees implicitly subsidize the rates for retirees. This implicit subsidy is OPEB and must be included in your OPEB liability – even if retirees pay 100% of their premiums.
What is an “explicit rate subsidy?”
The explicit rate is the rate participating employers pay as part of the monthly premiums that subsidizes the retiree monthly premiums. This subsidy reduces the monthly premiums paid by the retiree. The explicit rate is applied to each active employee of the government, therefore it doesn’t matter how many retirees the government may have. The explicit rate is set for the pool as a whole and all participating employers share in the cost.
Where do I get my numbers?
For employers participating in the Public Employees Benefits Board (PEBB) program and LEOFF 1 employers, the Office of the State Actuary provides on-line valuation tools (see link above).
Only PEBB member employers can use the PEBB tool. If you provide OPEB through any other plan, work with your actuary to get your own actuarial valuation. Only LEOFF 1 employers can use the LEOFF 1 tool. LEOFF 2 employers who provide OPEB should work with their actuaries to get their own actuarial valuations.
If you provide OPEB through any other plans or are uncertain about whether or not an arrangement qualifies as OPEB, please contact the SAO HelpDesk for guidance.
When will the BARS Cash Manual OPEB Section and Notes be updated?
The BARS Cash Manual has been updated to reflect these changes for the 2019 annual reporting requirements. See the links above.
SAO Recording – OPEB for Cash Basis Governments (eLearning runs 41:00)
- This webinar covers the OPEB reporting requirements, resources, and tools available for Cash Basis local governments.
Please contact SAO via the HelpDesk for assistance.