Passing the Baton: Transitioning to Retiree Health Benefits

Presented bySusan Jones

For discussion…

• Eligibility• Plan Choices• Program Provisions• Medicare

– Overview– Enrollment– Coordination with the State Program– Prescription Drug Coverage

Eligibility

• Must be a retiring state employee receiving an immediate (not deferred) VRS retirement benefit or periodic benefit from an ORP

• Must have been eligible for state coverage as an active employee at the time of retirement (not Extended Coverage)

• Must enroll within 31 days of retirement date

… and Not Eligible

• Coverage is declined at retirement (except waiver)

• Enrollment is not completed within 31 days of retirement

• Retirement benefit is deferred• Coverage is cancelled

Coverage Begins…

The first day of the first full month of retirement

Eligible Dependents

Same as active employees

• Legal spouse• Children

Plan Choices

• Non-Medicare Plans

• Medicare Plans

Current Non-Medicare Plans

• COVA Care/COVA Connect• COVA Care/COVA Connect with optional

benefits– Out-of-Network– Expanded Dental– Out-of-Network and Expanded Dental– Vision, Hearing and Expanded Dental– Out-of-Network, Vision, Hearing and Expanded Dental

• Regional Plan – Kaiser Permanente• COVA HDHP• TRICARE Supplement

Non-Medicare Retiree Group

2628

431

949

383

1930

1780

92

53 23733

COVA Care/Connect Basic - 2,628

CC w/Out of Network - 431

CC w/Expanded Dental - 949

CC w/Out of Net/Exp Dental - 383

CC w/Vision/Hearing/Exp Dental - 1,930

CC w/Out Net/Vision/Hearing/Exp Dental - 1,780

COVA HDHP - 92

Kaiser - 53

TRICARE Supplement - 23

Waived - 733

Medicare Supplemental Plan Options

• Advantage 65• Advantage 65 with

Dental/Vision• Advantage 65

Medical Only• Advantage 65

Medical Only with Dental/Vision

Medicare Retiree Group

5,999

18,971

922

1,979

1,803

3,120Advantage 65 - 5,999

Advantage 65 w/DV - 18,971

Advantage 65 Med Only - 922

Advantage 65 Med Only w/DV - 1,979

Option 1 - 1,803

Option 2 - 3,120

Changes Allowed at Retirement

• Enroll from active waive into single coverage

• Decrease membership• Waive to active/retiree

coverage as dependent (and return in the future per plan provisions)

• Plan change• Decline/cancel coverage –

no return to program

NOT Allowed at Retirement

• Increase in membership

Allowable Changes After Retirement

• Changes Consistent with Qualifying Midyear Events

• Membership Reduction (prospective)

• Cancellation (prospective )• Open Enrollment (non-

Medicare only)• Certain Medicare-

Coordinating Plan Changes (prospective)

Required Change

To a Medicare-coordinating plan immediately upon Medicare eligibility

NOTE: Active Employees

If covered based on current employment, Part B can be declined without penalty (no break in creditable coverage for 63 or more days)

Medicare 101

• What is it?• How do I get

it?• What do I

need?• How much

does it cost?

What is it?Medicare Eligibility

• At age 65• Before age 65

–Disability–End Stage

Renal Disease

What is it?Original Medicare Plan

• Medicare Part A – Hospital Insurance– Inpatient care– Skilled nursing facility– Hospice

• Medicare Part B – Medical Insurance– Doctors’ services– Preventive care

What is it?Medicare Part D

• Outpatient Prescription Drug Coverage

What is it?Medicare Part C

NOT ORIGINAL MEDICARE• Medicare Advantage

Plans• Medicare PPO Plans• Medicare HMO Plans• Medicare Private Fee-

for-Service Plans• Medicare Special Needs

Plans

How do I get it?Enrollment – A, B

• If no SSA/RRB benefits, you must actively enroll in A and B

• Automatic enrollment if you are already getting SSA/RRB benefits

• Declining Part B– Special Enrollment Period– General Enrollment Period– Late Enrollment Penalty

How do I get it?Enrollment – D

• Initial Enrollment• Special Enrollment• Annual

Coordinated Election Period

• Late Enrollment Penalty

What do I need?To Summarize:

• You must have Medicare Parts A and B (Original Medicare)when your retirement begins if you enroll in the State Retiree Health Benefits Program to avoid a gap in coverage!

• You can get Part D through or outside of the state program.

How much does it cost?Cost for Medicare Only

• Part A – usually no cost

• Part B - $99.90 for 2012 (unless IRMA)

• Part D – cost based on elected plan ($38 average premium—IRMA/LIS)

The State Program

How does the State Retiree Health Benefits Program work with Medicare?

•Plan Provisions•Premium Cost

How Does Advantage 65 Work?

2012 Medicare Benefit

A65 Benefit

Hospital Inpatient (Part A)

You pay Deductible/Copay$1,156, $289, $578

A65 pays all but $100+Additional AC for 365 Days

Physician and Other Services (Part B)

Generally, 80% coverage

Pays 20% after $140 deductible

Outpatient Prescription Drug (Part D)

Based on chosen plan Can elect enhanced Med D benefit with A65

Routine Dental Not covered Optional

Routine Vision Not covered Optional

Enhanced Part D Provisions

• Formulary– Exceptions/appeals

• Tiers• Excluded Drugs• Coverage Stages

– Deductible– Initial– Coverage Gap/Medicare

Coverage Gap Discount Program

– Catastrophic

Medicare Must Approve Part D:

• Enrollment• Disenrollment

–Only one plan• Penalties

Premium Cost

• Retiree pays the full cost of coverage

• Health Insurance Credit (VRS) if eligible

How is Premium Paid?

• VRS Benefit Deduction

• Direct Bill– Automatic Bank

Draft– Online payments

July 2012 through June 2013Plan Single Two-Person Family

CC/CC Basic $491 $909 $1,328

CC/CC + Out of Network $503 $925 $1,351

CC/CC +Exp Dental $506 $939 $1,373

CC/CC + Vision/Hrg/ED $519 $961 $1,402

CC/CC + OON/Exp Dental $518 $955 $1,395

CC/CC + OON/VH/ED $531 $977 $1,424

COVA HDHP $392 $727 $1,062

Kaiser Regional HMO $516 $951 $1,386

Tricare Supplement $60 $119 $160

2013 Premium Cost

Advantage 65 $237

Advantage 65 with Dental/Vision

$271

Advantage 65 – Medical Only $139

Advantage 65 – Medical Only with Dental/Vision

$173

Your Decision at Retirement…

• Is the state program the best choice for me?

Resourceswww.dhrm.virginia.gov

– Retiree Fact Sheets

www.medicare.gov– 800-MEDICARE

www.ssa.gov– 800-772-1213

Medicare COB– 800-999-1118

VICAP– 800-552-3402

Questions

Thank you!