More Retiree Health Plans Move Away From Traditional Medicare

[Northeast Agent]

[EXTERNAL LINK] - More Retiree Health Plans Move Away From Traditional Medicare

IBM introduced two new Medicare Advantage plans this year for its large retired work force, replacing a plan that paid for supplemental Medigap coverage along with prescription drugs, dental and vision.

IBM retirees were given the option to stick with the old benefit — but they would lose access to balances in their health reimbursement arrangements, an employer-funded plan that reimburses certain medical expenses and insurance premiums. In most cases, employers retain the right to change this type of benefit, says Trevis Parson, chief actuary for individual marketplace business at the benefits consulting firm Willis Towers Watson.

 

[somarco]

Many large employers jettisoned the traditional retiree health plans a dozen years or so ago and replaced them with a "fixed employer contribution" to a retiree only HRA plan. This was a major cost saving move that prolonged the life of the employer plan at least for a few years.

Now they are shifting again to a similar, but different kind, of fixed contribution plan and further protecting their at risk dollars by letting the MAPD carrier assume the risk.

ATT is doing the same thing as IBM. According to one ATT retiree client, the new plan is less flexible than the current HRA plan, plus their OOP for health care, including Rx, will increase significantly for some of them.

His ATT plan included $5400/year employer HRA contribution plus a catastrophic Rx reimbursement. His analysis is as follows:


The backdrop is (wife) is still taking a Tier 5 drug (Lynparza 150mg 4/day) that runs me between $11.5k and $12.5k per year depending on when we fill the first script of the year. That first co-pay prior to the doughnut hole is a dozy ($3,300+) and then the 5% co-pays run right at $800 each month. These are our actual out-of-pocket expenses.

For 2023 expenses, in early 2024 AT&T will reimburse all our actual costs above $6,550 (unless they change the threshold) up to $100k. So, in terms of actual expenses, her Part D Meds that I budget for should run about $6,750; the PDP premiums are negligible in the face of the 5% co-pays we pay once we burst through the doughnut hole. As a point of reference, our Catastrophic Prescription Drug reimbursement for 2022 totaled $5,475.36 [with her OOP expenses totaling $12,02536].

They currently have a G plan which they will keep through the end of this year. One major concern, in addition to rising Rx cost under a MAPD, is access to some specialists that have treated them (especially the wife) for a number of years. She has an extremely rare form of ovarian cancer that has metastasized to other organs.

She has been battling this illness for about 5 years and frankly, I am surprised she is still with us. They would be considered upper income by most standards but live in a somewhat rural area about 50 miles from Atlanta.

They have until the end of 2023 to remain on the HRA before it is eliminated.

These types of changes have not been welcomed by retirees who see this as a further deterioration of promised and earned benefits.

 

[rmhaire]

Many large employers jettisoned the traditional retiree health plans a dozen years or so ago and replaced them with a "fixed employer contribution" to a retiree only HRA plan. This was a major cost saving move that prolonged the life of the employer plan at least for a few years.

Yep. My wife retired from Bell South years ago. Same thing. Each year she gets her benefits booklet. Coverage across the board getting less and less. All the big ones are doing it.

 

[somarco]

Can employers end retiree health insurance?

https://www.dol.gov/sites/dolgov/fi...ns/can-the-retiree-health-benefits-be-cut.pdf

Generally, when you have retiree coverage from an employer or union, they control this coverage. Employers aren't required to provide retiree coverage, and they can change benefits, premiums, or even cancel coverage.
https://www.medicare.gov/supplements-other-insurance/retiree-insurance

AT&T is no longer offering the HRA reimbursement plan for new retirees. Instead, they have switched and now offer a specific AT&T retiree Advantage plan.
https://www.meritfinancialadvisors.com/blog/important-att-retirement-plan-updates/

SPIN . . .
Reinforcing IBM’s commitment to retiree healthcare and wellbeing, coverage under the IBM retiree medical plan for Medicare-eligible participants will transition to a new IBM-sponsored Group Medicare Advantage program administered by UnitedHealthcare, starting on January 1, 2023.
[EXTERNAL LINK] - IBM Updates Benefits Program for IBMers and Retirees


NY Mayor dictates change

New York City Mayor Eric Adams is showing no signs of stopping an already-delayed plan to switch 250,000 retired municipal workers from traditional Medicare to a private Medicare Advantage plan – with or without the cooperation of the City Council or the support of retirees themselves.

The city has proposed allowing retirees to keep their current benefits for a large fee ($191 per month), but the way things are going, that may not end up being an option. This proposed switch was supposed to take effect a year ago in January 2022 — but has faced stiff opposition. Meanwhile, some of those critics are urging the city to establish a panel of stakeholders to come up with alternative ways to achieve the $600 million savings that this Medicare Advantage switch is supposed to deliver.

Medicare Advantage plans, which shift seniors’ benefits to health plans administered by private insurance companies, have become increasingly popular in recent years – but have also faced criticism for having smaller networks of health care providers than traditional Medicare, and for improperly denying patients’ medical claims.
[EXTERNAL LINK] - Mayor Adams plows ahead with plan to privatize health benefits for 250,000 NYC municipal retirees


UNION PACIFIC
Retiree HRA coverage terminates effective December 31, 2023. Any balance remaining in your Retiree HRA on that date will be forfeited, subject to any post- year end Retiree HRA claim processing run-out period described in the section, “Retiree HRA Claims and Appeals” beginning on page 27.
https://www.up.com/cs/groups/public...nativedocs/pdf_e_hr_retiree_hra_guid_2023.pdf

 

[Northeast Agent]

[EXTERNAL LINK] - What 250K NYC retirees can expect from Medicare Advantage as opt-out deadline approaches

Update July 7, 2023: A Manhattan judge has temporarily blocked the city’s move to switch municipal retirees onto a new Medicare Advantage plan. A group of seniors requested the temporary restraining order when they filed a lawsuit in late May seeking to prevent the Adams administration from moving forward with the change in health coverage. The restraining order will be in place while that case proceeds in court.

 

[Northeast Agent]

[EXTERNAL LINK] - Judge ‘Permanently’ Bans Medicare Advantage Switch for City Retirees

A prominent labor historian said the retirees’ victory signals the “beginnings of an effort to create a nationwide movement” to enable retirees to retain their traditional Medicare.

“I think the New York example shows that if retirees who know how to organize — and after all these people who had experience in the union movement, people who are used to acting together — if they band together and dig in their heels, they can really tie up the city and other government entities into knots,” said Joshua Freeman, professor emeritus at Queens College and a member of the CUNY Professional Staff Congress retiree council.

“They’re pushing back and they have been remarkable in what they’ve achieved in New York City so far — it’s not over, but it’s pretty incredible what’s happened.”

 

[somarco]

Unfortunately, most retirees did not belong to a union and benefits were not negotiated in a CBA. Although I am not pro-union I applaud this group for standing up to the mayor and pursuing legal channels to get what was promised.

Retirees can't strike so the court was the obvious route to take.

 

[kgmom219]

Just saw the single choice for Dow retirees. Aetna MAPD PPO. $50/month.

Identical plan available for $0.

I quit.

 

[somarco]

Just saw the single choice for Dow retirees. Aetna MAPD PPO. $50/month.

Identical plan available for $0.

I quit.

But employees were told during their career that the company would take care of them for life.

What happened?

 

[StephanieCJ]

We got the AON MAPD info at our office yesterday. $900 MOOP, $100 for a hospital stay. The catch is, it is a PPO and while the copays are the same in and out-of-network, we have a major hospital in our area that has zero interest in billing as an out-of-network provider. Those people who have doctors at that hospital will have to make a decision that is pretty impactful for their future.