Health Insurance After You Retire

1
Health InsuranceAfterYou Retire
??????????????????????????????????????????????
Presented by Guerren Solbach
2
Objective Answer These Questions

• What health welfare benefits can continue into
  retirement?
• Who is eligible for retiree health?
• How much will I have to pay?
• What about Medicare?
• Is UC planning to cancel retiree health
  insurance?

3
Health Welfare Benefits
??????????????????????????????????????????????
??????????????????????????????????????????????
4
Health Welfare Benefits

• Retirees may continue into retirement
• Medical, Dental Legal
• Vision VSP offered to retirees 7/1/2008
• Retiree pays full VSP premium
• Health Net Kaiser cover eye glasses for members
  with Medicare

5
More on Health Welfare Benefits

• ADD retiree plan is available through direct
  payment to American Home Assurance
• Life Insurance ends
• May convert to individual policy
• Disability Insurance ends last day actively at
  work or on vacation
• Auto/Home/Renters Insurance
• Continue through direct payment to A/California
  Casualty
• HCRA/DCRA/TIP end

6
Eligibility
??????????????????????????????????????????????
??????????????????????????????????????????????
7
Eligibility for Retiree Health

• Medical Dental insurance may continue into
  retirement
• UC Retirement Plan (UCRP) members must elect
  monthly retirement income
• Must retire within 120 days of terminating UC
  employment
• Insurance coverage must be continuous
• If you elect a lump sum cash out, you forfeit UC
  health insurance

8
More on Eligibility

• If you entered UCRP before 1/1/1990
• Ages 50-54 Must have 10 years of service credit
• Age 55 Must have 5 years of service credit
• Must not have had a break in service of more than
  120 days
• Eligible for 100 of UCs maximum contribution
  toward medical and dental insurance
• If you entered UCRP on or after 1/1/1990
• Graduated Eligibility

9
Graduated Eligibility

• Percentage of UCs maximum contribution based on
  full years of UCRP service credit

10
100 of UCs Contribution
11
Example A (2009)

• Employee with 20 years of UCRP service credit
  retires with Health Net (non-Medicare)
• Total Premium 431.92
• Max UC contribution 386.56
• Net cost to retiree 45.36

12
50 of UCs Contribution
13
Example B (2009)

• Employee with 10 years of UCRP service credit
  retires with Health Net (non-Medicare)
• Total Premium 431.92
• Max UC contribution 193.28 (50 of 386.56
  193.28)
• Net cost to retiree 238.64 (431.92 - 193.28)

14
Premiums
??????????????????????????????????????????????
??????????????????????????????????????????????
15
About Retiree Health Plans

• Same medical dental plans as employees
• May get termination letter when campus coverage
  ends and UC Retirement System coverage begins
• No salary banding
• Retiree rates are equal to the 46,001-92K
  employee rates
• Exception Medicare-coordinated plans
• Open Enrollment
• Period of Initial Eligibility
• Can suspend medical coverage

16
Health Plan Premiums

• http//www.hr.ucdavis.edu/hcf
• Click on Thinking About Retiring?
• Determine which medical plans are available by
  zip code
• Premium estimator tool (MS Excel)
• Offers eligibility guidance
• Estimates how much you will pay (based on current
  years premiums)

17
Medicare
??????????????????????????????????????????????
??????????????????????????????????????????????
18
About Medicare

• Medicare is the federal health insurance program
  for those over 65 and some disabled
• Part A (premium-free for most)
• Part B (costs 96.40/month in 2009)
• Costs more if you make 85,000
• UC relies on Medicare to offset the cost of
  retiree medical insurance
• Retirees without Medicare cost 3 times more to
  insure
• Medicare-coordinated plans usually cost less

19
100 of UCs Contribution
20
Example C (2009)

• Employee with 20 years of UCRP service credit
  retires with Medicare and Health Net
• Total Premium 246.63
• Part B premium 96.40
• Max UC contribution 386.56
• Part B reimbursement 96.40 (386.56 - 246.63
  96.40)
• Net cost to retiree 0 (96.40 - 96.40)

21
UCs Medicare Requirements

• Retirees and their family members must enroll in
  Medicare Part B
• If they are enrolled in medical insurance
• If they are eligible for Part A free of charge
• You can be eligible for Part A for free through a
  current or former spouse, even if you didnt pay
  in to Social Security

22
Medicare HMOs

• Medicare Advantage plans
• If you have Medicare A B, and you are enrolled
  in an HMO, you must assign your Medicare benefits
  to the HMO (by form)
• Medicare pays a flat monthly fee to the insurance
  company
• Medicare cannot be used separately from the
  Medicare Advantage plan

23
Medicare Advantage Plans
24
Medicare Anthem Blue Cross

• Medicare primary Anthem Blue Cross plan
  secondary
• Medicare-certified providers must be used
• 91 of U.S. physicians participate in Medicare as
  of 2003
• Ask if accepting new Medicare patients
• Providers that do not accept assignment can
  charge up to 15 more

25
Medicare CIGNA HRA PPO

• Employees who retire with CIGNA can keep it into
  retirement until/unless they are eligible for
  Medicare
• CIGNA HRA PPO is not offered to retirees
• Stand-Alone Health Reimbursement Account
• Claim left over after you lose eligibility due
  to Medicare

26
Medicare Part D

• Prescription drug benefit started in 2006
• Subsidizes medical plan premiums
• Part D is a payment mechanism
• The Rx coverage of UC medical plans (except Core)
  is equivalent to or better than Part D
• Considered creditable coverage
• Formulary may differ from non-Medicare plan

27
More on Part D

• Retirees with Medicare must complete a form
• No additional Part D premium
• Complicates or prevents double coverage
• Enrollment in another Part D plan may result in
  loss of UC coverage

28
The Future
??????????????????????????????????????????????
??????????????????????????????????????????????
29
What does the future hold?

• Premiums continue to rise
• Since 1999, the cost of health insurance has
  increased by 119.
• The average cost of family coverage is 12,680 a
  year.
• As of 2008, 31 of large firms (200 employees)
  offered retiree health insurance
• Down from 66 in 1988
• Source Kaiser Family Foundation Employer
  Health Benefits 2008 Annual Survey

30
Funding health insurance

• UCs contribution to health insurance is not
  guaranteed to employees or retirees
• Employee premiums paid by department
• Retiree premiums
• Campus assessment fee 3.09 of employee covered
  compensation for FY 2008
• Not funded by the UC Retirement Plan

31
Future of insurance through UC

• The University intends to continue retiree health
  insurance
• Helps us recruit and retain employees
• As a socially responsible institution, we dont
  want to add to the uninsured

32
Conclusion
??????????????????????????????????????????????
??????????????????????????????????????????????
33
Conclusion

• Whether youre an employee or a retiree
• The Health Care Facilitator Program is here to
  help!

34
Health InsuranceAfterYou Retire
??????????????????????????????????????????????
Presented by Guerren Solbach