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Health Insurance After You Retire Presented by Guerren Solbach.

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Presentation on theme: "Health Insurance After You Retire Presented by Guerren Solbach."— Presentation transcript:

1 Health Insurance After You Retire Presented by Guerren Solbach

2 Health Insurance After You Retire2 Objective: Answer These Questions What health & welfare benefits can continue into retirement? What health & welfare benefits can continue into retirement? Who is eligible for retiree health? Who is eligible for retiree health? How much will I have to pay? How much will I have to pay? What about Medicare? What about Medicare? Is UC planning to cancel retiree health insurance? Is UC planning to cancel retiree health insurance?

3 Health & Welfare Benefits

4 Health Insurance After You Retire4 Health & Welfare Benefits Retirees may continue into retirement: Retirees may continue into retirement: – Medical, Dental & Legal Vision: VSP offered to retirees 7/1/2008 Vision: VSP offered to retirees 7/1/2008 – Retiree pays full VSP premium – Health Net & Kaiser cover eye glasses for members with Medicare

5 Health Insurance After You Retire5 More on Health & Welfare Benefits AD&D: retiree plan is available through direct payment to Chartis (formerly AIG/American Home Assurance) AD&D: retiree plan is available through direct payment to Chartis (formerly AIG/American Home Assurance) Life Insurance ends Life Insurance ends – May convert to individual policy Disability Insurance ends last day actively at work or on vacation Disability Insurance ends last day actively at work or on vacation Auto/Home/Renters Insurance Auto/Home/Renters Insurance – Continue through direct payment to A+/California Casualty Health FSA/Dependent Care FSA/TIP end Health FSA/Dependent Care FSA/TIP end

6 Eligibility

7 Health Insurance After You Retire7 Eligibility for Retiree Health Medical & Dental insurance may continue into retirement: 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 If you elect a lump sum cash out, you forfeit UC health insurance

8 Health Insurance After You Retire8 More on Eligibility If you entered UCRP before 1/1/1990: 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: If you entered UCRP on or after 1/1/1990: – Graduated Eligibility

9 Health Insurance After You Retire9 Graduated Eligibility Percentage of UCs maximum contribution based on full years of UCRP service credit Percentage of UCs maximum contribution based on full years of UCRP service credit Service CreditPercentage of UCs contribution 0-4N/A 5-9 If Age + Service Credit 75: 50% (otherwise not eligible) 1050% 11-20 55-100% (5% for every year above 10)

10 Health Insurance After You Retire10 100% of UCs Contribution Net cost

11 Health Insurance After You Retire11 Example A (2010) Employee with 20 years of UCRP service credit retires with Health Net (non- Medicare) Employee with 20 years of UCRP service credit retires with Health Net (non- Medicare) Total Premium: $487.43 Total Premium: $487.43 Max UC contribution: $427.05 Max UC contribution: $427.05 Net cost to retiree: $60.38 Net cost to retiree: $60.38

12 Health Insurance After You Retire12 50% of UCs Contribution Net cost

13 Health Insurance After You Retire13 Example B (2010) Employee with 10 years of UCRP service credit retires with Health Net (non- Medicare) Employee with 10 years of UCRP service credit retires with Health Net (non- Medicare) Total Premium: $487.43 Total Premium: $487.43 Max UC contribution: $213.53 (50% of $427.05 = $213.53) Max UC contribution: $213.53 (50% of $427.05 = $213.53) Net cost to retiree: $273.90 ($487.43 - $213.53) Net cost to retiree: $273.90 ($487.43 - $213.53)

14 Premiums

15 Health Insurance After You Retire15 About Retiree Health Plans Same medical & dental plans as employees Same medical & dental plans as employees May get termination letter when campus coverage ends and UC Retirement System coverage begins May get termination letter when campus coverage ends and UC Retirement System coverage begins No salary banding No salary banding Open Enrollment Open Enrollment Period of Initial Eligibility Period of Initial Eligibility Can suspend medical coverage Can suspend medical coverage

16 Health Insurance After You Retire16 Health Plan Premiums http://www.hr.ucdavis.edu/hcf http://www.hr.ucdavis.edu/hcf – Click on Thinking About Retiring? Determine which medical plans are available by zip code Determine which medical plans are available by zip code Premium estimator tool (MS Excel) Premium estimator tool (MS Excel) – Offers eligibility guidance – Estimates how much you will pay (based on 2010 premiums)

17 Medicare

18 Health Insurance After You Retire18 About Medicare Medicare is the federal health insurance program for those over 65 and some disabled Medicare is the federal health insurance program for those over 65 and some disabled – Part A (premium-free for most) – Part B (costs $110.50/month in 2010) Costs more if you make > $85,000 Costs more if you make > $85,000 UC relies on Medicare to offset the cost of insurance UC relies on Medicare to offset the cost of insurance Medicare-coordinated plans usually cost less Medicare-coordinated plans usually cost less

19 Health Insurance After You Retire19 100% of UCs Contribution Part B reimbursement

20 Health Insurance After You Retire20 Example C (2010) Employee with 20 years of UCRP service credit retires with Medicare and Health Net Employee with 20 years of UCRP service credit retires with Medicare and Health Net Total Premium: $293.60 Total Premium: $293.60 Part B premium: $110.50 Part B premium: $110.50 Max UC contribution: $400.48 Max UC contribution: $400.48 Part B reimbursement: $96.40 ($400.48 - $293.60 > $96.40) Part B reimbursement: $96.40 ($400.48 - $293.60 > $96.40) Net cost to retiree: $14.10 ($110.50 - $96.40) Net cost to retiree: $14.10 ($110.50 - $96.40)

21 Health Insurance After You Retire21 UCs Medicare Requirements Retirees and their family members must enroll in Medicare Part B: 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 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 Health Insurance After You Retire22 Medicare & HMOs Medicare Advantage plans 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 Health Insurance After You Retire23 Medicare Advantage Plans HMO+ Medicare Health NetSeniority Plus Kaiser PermanenteSenior Advantage Western Health AdvantageWHA Care +

24 Health Insurance After You Retire24 Medicare & Anthem Blue Cross Medicare primary; Anthem Blue Cross plan secondary Medicare primary; Anthem Blue Cross plan secondary Medicare-certified providers must be used Medicare-certified providers must be used – 96.5% of U.S. physicians participate in Medicare as of 2009 – Ask if accepting new Medicare patients

25 Health Insurance After You Retire25 Medicare & CIGNA Employees who retire with CIGNA Choice Fund PPO can keep it into retirement until/unless they are eligible for Medicare Employees who retire with CIGNA Choice Fund PPO can keep it into retirement until/unless they are eligible for Medicare CIGNA Choice Fund PPO is not offered to retirees CIGNA Choice Fund PPO is not offered to retirees Stand-Alone Health Reimbursement Account Stand-Alone Health Reimbursement Account – Claim $$ left over after you lose eligibility due to Medicare

26 Health Insurance After You Retire26 Medicare Part D Prescription drug benefit started in 2006 Prescription drug benefit started in 2006 Subsidizes medical plan premiums Subsidizes medical plan premiums – Part D is a payment mechanism The R x coverage of UC medical plans (except Core) is equivalent to or better than Part D The R x 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 Formulary may differ from non-Medicare plan

27 Health Insurance After You Retire27 More on Part D Retirees with Medicare must complete a form Retirees with Medicare must complete a form No additional Part D premium No additional Part D premium Complicates or prevents double coverage Complicates or prevents double coverage Enrollment in another Part D plan may result in loss of UC coverage Enrollment in another Part D plan may result in loss of UC coverage

28 The Future

29 Health Insurance After You Retire29 What does the future hold? Premiums continue to rise Premiums continue to rise – Since 1999, the cost of family coverage has increased by 131%.* – The average cost of family coverage is $13,375 a year.* As of 2009, 29% of large firms (200+ employees) offered retiree health insurance* As of 2009, 29% of large firms (200+ employees) offered retiree health insurance* – Down from 66% in 1988* * Source: Kaiser Family Foundation Employer Health Benefits 2009 Annual Survey

30 Health Insurance After You Retire30 Funding health insurance UCs contribution to health insurance is not guaranteed to employees or retirees UCs contribution to health insurance is not guaranteed to employees or retirees Employee premiums: paid by department Employee premiums: paid by department Retiree premiums: Retiree premiums: – Campus assessment fee: 3.12% of employee covered compensation for FY 2009 – Not funded by the UC Retirement Plan

31 Health Insurance After You Retire31 Future of insurance through UC The University intends to continue retiree health insurance 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 Health Insurance After You Retire32 Future of insurance through UC Task Force on Post-Employment Benefits Task Force on Post-Employment Benefits – To make recommendations to the President in June 2010 – Recommendations which allow the Regents to meet: Fiduciary Obligations Fiduciary Obligations Educational Responsibilities Educational Responsibilities

33 Conclusion

34 Health Insurance After You Retire34 Conclusion Whether youre an employee or a retiree: The Health Care Facilitator Program is here to help!

35 Health Insurance After You Retire Presented by Guerren Solbach


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