Health Care Options IU Retiree Status Susan Brewer University Director of Health Care and Welfare Program Services IUPUI Pre-Retirement Symposium March

Health Care OptionsIU Retiree Status

Susan BrewerUniversity Director of Health Care and Welfare Program Services

IUPUI Pre-Retirement SymposiumMarch 25, 2010

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This presentation does not reflect

any potential changes related to

recent Health Care Reform legislation

March 25, 2010 IUPUI Pre-Retirement Symposium

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IU Retiree Status Health Care Options

• Who’s eligible?

• What plans are available?• Under age 65• Age 65+

• Some Rules and Considerations

• Medicare Part D prescription coverage


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Resources

• University Benefits web page

http://hr.iu.edu

• Participant Rights & Responsibilities

• New online benefits video


http://hr.iu.edu/

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IU Retiree Status Health Care Options


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New Benefits Video


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Who is Eligible?

• Employees with “IU Retiree Status” (meet age and length-of-service criteria)

• Their dependents covered at the time of termination (or at the time COBRA ends)


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IU Retiree Status

• At ages 60, 61, 62 employees covered by PERF on the date of termination will qualify with at least 15 years of IU service.

• Years of IU service are pro-rated for ages that fall between the ages listed above.


Age at TerminationMinimum Years of Active

Full-Time IU ServiceAge at Termination

Minimum Years of Active Full-Time IU Service

55 30 61* 18

56 28 62* 16

57 26 63 14

58 24 64 12

59 22 65 10

60* 20

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IU Retiree Status

• Years of IU service – full-time, appointed service excluding periods of leave without pay. Sabbatical leaves and leaves for purposes of research of distinction are included.


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IU Retiree Status Benefits

• Health Care• Life Insurance• Fee Courtesy• Retain IU Email Address• Other Campus-Specific Benefits


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Health Plan Options (As of January 2010)

1. Retirees may move to their spouse’s IU coverage and retain eligibility.

2. Temporary Continuation of Active Employee Coverage – “COBRA”

3. Under age 65 (i.e., not Medicare eligible)• IU PPO $900 Deductible

4. Age 65+ (i.e., Medicare eligible)• Blue Retiree Plan supplement (Insured by Anthem)


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“Rules” for Retiree Health Coverage

• Those retirees eligible for Medicare MUST carry Medicare Parts A & B; and must carry a Medicare D plan in order to have prescription coverage.

• Retiree/Spouse may split coverage between plans when one is over and one is under age 65

• Cannot reinstate after dropping IU-sponsored coverage

• Generally cannot add new dependents


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COBRA Option – Federal program for all employees losing coverage

• Temporary Continuation of Active Coverage (PPOs or HDHP/Medical Savings and/or Dental)

• 18 months (however, COBRA medical ends if you become Medicare eligible after enrolling in COBRA)

• Advantages:• Keep Dental Coverage (dental is not a retiree benefit)• Maintain Open Enrollment Options (e.g., add dependents)• Keep PPO Blue Access (not a retiree option)


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Options Under Age 65

• Same PPO $900 Deductible plan as active employees, except:

• Premium is the same as COBRA rate

• You can think of this plan as a continuation of COBRA medical coverage until you reach Medicare eligibility.

• Dental coverage is not a Retiree option, but you may continue it for 18 months under COBRA


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2010 Premium Rates

IU PPO $900 Deductible Plan – Under Age 65 (same as COBRA Rates)

• One Participant $ 404.20 • Participant and Child(ren) $ 806.25• Retiree and Spouse $ 985.63• Retiree and Family $ 1,119.33


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What is the Advantage of IU-sponsored Coverage?• You don’t have to show “proof of insurability” or fill out a

health questionnaire.• There is no pre-existing condition exclusion.• The premium is not based on your ‘enrolled’ or

‘attained’ age• The premium is not based on lifestyle factors such as

smoking, weight, or on prescription drug use, etc.• Prescription benefit: no maximum and copays are low


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Commercial Plan Cost Comparison

• Female, age 63 • No pre-existing conditions; non-smoker; not overweight • $2,000 deductible • $30 visit copay (only 2 visits covered, i.e., major medical

coverage only) • 30% copay In-Network, 40% copay Out-of-Network• $5,000 copay maximum • $500 prescription coverage limit; $200 Rx deductible• Estimated Premium: $352.16/month (coverage may be

denied based on risk factors)


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Commercial Plan Cost Comparison

• Female, age 63 • No pre-existing conditions; non-smoker • $500 deductible • $30 primary care/ $40 specialist visit copay • 20% copay In-Network, 40% Out-of-Network• $3,000 copay maximum • Prescription Coverage: $15/ $30 w/ $250 deductible and

40% up to $4,000 maximum benefit• “Base Premium”: $658.88/month


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Options Age 65 and Over

Anthem Blue Retiree Plan• Medicare Supplement or “Medigap” coordinates

with “Original Medicare”

• Pays Medicare deductibles and copays

• Includes a wellness benefit (in addition to Medicare preventive coverage)

• No prescription coverage (you must elect a Medicare Part D plan to have prescription coverage)


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Age 65 and Over

Anthem Blue Retiree

Requirements:

• You must be Medicare Eligible (Age 65+)

• You must enroll in Medicare Parts A & B

• If you want prescription coverage, you must enroll in Medicare Part D


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Some Things to Consider

There is no need for 2 Medicare Supplements A Retiree may switch to spouse’s IU coverage and

retain eligibility for IU Retiree coverage options whether spouse has IU Retiree Status or not

Compare non-IU Plans (Examples: AARP, BC/BS, RIPEA, etc.)

In some areas, Medicare Advantage plans (HMO and PPO) may be available—they combine medical and prescription coverage in one plan and one premium. Clarian has one such plan.


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Clarian Health Plan Medicare Advantage

You pay Medicare Part B premium plus one HMO premium with includes both medical and Rx

Uses a Clarian HMO network

4 plan options: Value, Select, Select+, Choice

Premiums: $0, $37, $67, $93

Plans have fixed-dollar copays on most services, e.g. office visits, inpatient per day, Rx

www.clarinhealthplans.org 800-455-9776


http://www.clarinhealthplans.org/

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www.medicare.gov


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What Does Blue Retiree Coverage Cost?

The Retiree pays the full cost of coverage.

Premiums Change Annually with inflation, but otherwise are not based on age

For PPO retiree and dependent coverage, when one is ‘under 65’ and one is ‘over 65,’ separate premiums must be added together.


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2010 Premium Rates

Blue Retiree Plan – Age 65+

• One Participant $175.29 • Retiree and Spouse $350.58

• Note: to obtain the total cost, you must add the cost of Medicare B (about $100) and a Medicare D prescription plan (about $28 to $100).


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Premiums – Other Commercial Plans

Most commercial plans are based on age ratings:• Issue-age-rated• Attained-age-rated

May also begin at an “introductory” discount price that ends after the introductory period.

After your Special Enrollment Period, you can be denied coverage; have coverage delayed; or have the premium based on health factors.


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Issue-age-rated: Rate is based on your age at the time you buy the policy

• Younger pays less; older pays more• Rates can go up based on inflation and other

factors, but not due to age• Example:

• Retiree A, age 65, buys a plan pays $160/month;• Retiree B, age 72, buys the same plan and pays

$190/month.


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Attained-age-rated: Rate is based on current age • As you get older, the rate goes up based on your

age. Rates can also go up based on inflation and other factors.

• These plans are the least expensive to start and may become the most expensive over time

• Example: • Retiree C, age 65, buys a plan and pays $140/month; at

age 66 pays $150…. and by age 75 has gone to $200/month.


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Medicare Enrollment

• Medicare open enrollment is a 6-month period: starts first month in which you are both age 65 and enrolled in Medicare Part B.

• During this open enrollment you cannot be denied a supplement plan, charged higher premiums for health factors, or be made to wait for pre-existing condition coverage.

• Those with Medicare can switch plans between January 1 and March 31 each year.


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Medicare Part D Notice

• Federal law requires employers to notify employees of certain Medicare prescription drug information, deadlines, and penalties.

• IU’s notice is printed annually in the Informed Employee bulletin and at http://hr.iu.edu

• IU covered employees do not pay a penalty to enroll in Medicare Rx plan within 63 days of retiring.

• Premium penalties after 63 days are significant

• Note: there is no 63-day grace period when COBRA ends


http://hr.iu.edu/

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Finding a Medicare D Plan


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Other Retiree Status Benefits

• Retiree Life Insurance $6,000 in IU-paid life insurance Keep beneficiary current!

• IU Tuition Benefit Same benefit as active employee

• Keep IU Email Address


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Other IUPUI Campus Benefits

• Discount on non-credit classes through Continuing Studies

• Employee prices on hardware, software, and technology workshops through UITS

• Employee prices at IUPUI sports facilities


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Separation Pay

• Staff employees receive pay for certain accrued paid-time-off benefits

• 2010 tax rates for separation pay: Federal State County FICA

• Consider deferring separation pay to supplemental retirement plans


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Separation Pay

• Support and service staff: Accrued holidays Accrued compensatory time Vacation hours up to the maximum allowed per university

policy Pro-rated sick time for accrued sick hours in excess of

152 hours if enrolled in PERF or IU Retirement Plan 11.25%


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Separation Pay

• Professional staff: Accrued holidays Accrued compensatory time, if applicable Accrued PTO hours Accrued honorary vacation (if applicable) up to the

maximum allowed per university policy Pro-rated sick time for accrued sick hours in excess of

152 if enrolled in PERF or IU Retirement Plan 11.25%


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University Human Resource Services

http://hr.iu.edu

Click “Benefits”


http://hr.iu.edu/

Documents

Health Care Options IU Retiree Status Susan Brewer University Director of Health Care and Welfare Program Services IUPUI Pre-Retirement Symposium March