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Retiree Health Options RIC/AFT Rhode Island College April 2008.

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Presentation on theme: "Retiree Health Options RIC/AFT Rhode Island College April 2008."— Presentation transcript:

1 Retiree Health Options RIC/AFT Rhode Island College April 2008

2 Current Retiree Health Options COBRA Board of Governors (BOG) Plan Medicare Part A Medicare Part B Medicare Part D Supplement to Medicare (Medi-gap) Cost Share Schedule Premiums

3 COBRA – Pre 65 Continuation in the active group plan is available for retirees and/or spouses for up to 18 months*.  Medical – United Health Care (includes prescriptions)  Dental – Blue Cross Dental  Vision – Vision Service Plan (VSP) Based on age and years of service the BOG will pay all or part of the monthly medical premiums only and for the retiree only. (as of 2/1/08 RIERS will NOT pay COBRA premiums) Spouses have the same options, however, they must pay 100% of premiums. Continuation under COBRA is not available to retirees who are over 65, unless they are already Medicare-entitled and enrolled in at least Part A prior to retirement.

4 Board of Governors (BOG) Pre-65 Board of Governors (BOG) medical insurance is available for retirees under age 65* and spouses at retirement or following the COBRA period. The non-COBRA plans available through the BOG are primarily the same as the active group except for the prescription rider.  Under the United Heath Care plan for retirees you pay 20 % and UHC pays 80% of the cost at participating pharmacies rather than the three tier plan. Retirees and/or spouses may join the BOG plan anytime during retirement or at the end of the COBRA period, even if participation is not elected at retirement (limited under certain circumstances.) Dental and vision plans are available only during the COBRA period and premiums are 100% paid by the retiree and/or spouse.

5 Medicare-Eligible Post 65 Medicare-eligible retirees must enroll in Medicare Part A and Part B at the appropriate time. Once a retiree becomes Medicare-eligible and/or age 65 (after retirement) all COBRA or BOG medical, dental and vision plans automatically terminate. If you become Medicare-eligible or turn 65 during the initial 18 month COBRA period, your covered spouse qualifies for an additional 18 months of COBRA coverage (18 mths plus another 18 mths). Post-65 Supplemental Medicare Plans (Medi-gap) available:  Plan 65 – no prescription drug coverage; available to out-of-state retirees  Medicare Complete – prescription drug coverage included (meets “credible coverage” requirement); limited dental and vision coverage; primary residence must be RI; When eligible, information and enrollment material is mailed to the retiree.

6 Medicare-Eligible Post 65 Based on age and years of service the BOG Plan will pay all or part of the monthly premiums for the Post-65 supplemental plan for the retiree only. Spouses have the same options, however, they must pay 100% of premiums; All eligible retirees MUST enroll in Medicare Part B upon retirement or during their enrollment period.  Part B monthly premiums are deducted from Social Security benefits  Late enrollment penalty (10% for each full 12 month period that you could have had Part B, but didn’t sign up for it.) Part A & B become PRIMARY coverage

7 BOG Premium Cost Share Current Schedule ServiceAge RetireStates % Employee % 10-156050% 16-226070%30% 23-276080%20% 28+Under 6090%10% 28+60100%0% 35+ Any100%0% ServiceStates % Employee % 10-1550% 16-1970%30% 20-2790%10% 28+100%0% Pre-65 COBRA or BOG Plan Medical Cost Share Post-65 Medicare Supplemental (Medi-Gap) Cost Share

8 Current Medical Premiums The following premiums are for only individual coverage through 6/30/08. United Health Care  COBRA Rate: $452.28  BOG Rate: $708.94 Delta Dental  COBRA Rate:$27.29  BOG Rate:N/A VSP  COBRA Rate:$6.35  BOG Rate:N/A Post-65/Medicare Supplemental Plans  Plan 65$179.77  Medicare Complete$107.00

9 MEDICARE Part B Premiums 2008 If Your Yearly Income in 2007 was You Pay Monthly File Individual Tax ReturnFile Joint Tax Return $82,000-or below$164,000 or below $ 96.40 $82,001-$102,000$164,001-$204,000 $ 122.20 $102,000-$153,000$204,001-$306,000 $ 160.90 $153,001-$205,000$306,001-$410,000 $ 199.70 Above $205,000Above $410,000 $ 238.40

10 Cost is the retiree’s responsibility Cost depends on plan elected Visit or call 1-800-633-4227 to find Medicare drug plans available in your Late enrollment penalty (premium x 1% of national base premium ($27.93 x 1% =$.28 in 2008) MEDICARE Part D

11 My Retirement Medical Costs Years of Service: ______ Age at Retirement: ______ Based on pre-65 age and years of service BOG will pay: ______%  I will pay: A ______% Based on post-65 age and years of service BOG will pay: ______%  I will pay: B ______% My Medicare cost: Part B C$_______ ; Part D D$_______ United Health Care  COBRA Rate: $452.28 x A ______% = $_____________/up to 18 months  OR BOG Rate: $708.94 x A ______% = $_____________/month until age 65 Delta Dental  COBRA Rate:$27.29  BOG Rate:N/A VSP  COBRA Rate:$6.35  BOG Rate:N/A Over 65/Medicare Supplemental Plans  Medicare Part B C $____________/month  Medicare Part D D $____________/month  Plan 65$179.77 x B ______% = $_____________/month  Medicare Complete$107.00 x B ______% = $_____________/month Important Note: All premiums may be adjusted annually on Jan 1 or July 1

12 Retirement and Other Benefits Social Security College Retirement Plan or Rhode Island Employees Retirement System (RIERS) Life Insurance Billing

13 Social Security When ready to apply for Social Security benefits or Medicare, contact the Social Security Administration office not later than three months prior to attaining age 65 or the date you wish to begin benefits.  1-800-772-1213  Local Office - 528-4501  Or visit for more information or to apply

14 Retirement Plans Participants with TIAA/CREF, VALIC or MetLife have several income options.  TIAA/CREF, Contact Allen Waters, Individual Consultant, at 1-800-842-2004 to discuss income options or to schedule a personal meeting.  VALIC, MetLife or ING participants, contact appropriate representative. Members of the State of Rhode Island Employee's Retirement System (RIERS) MUST contact that office at 222-2203 to apply for retirement.  RIERS members elect and enroll in medical benefits through that office

15 LIFE INSURANCE Basic life insurance policy may be continued into retirement  Base policy face value reduces at age 65 as shown below  Supplemental policy does not continue but may be converted; contact Aetna at 1-800-523-5065 Basic Life Insurance policy reduces as follows: Example: Face value of policy at age 65 was $40,000 – cost $192.96/yr Age 65 - 76% of coverage at age 65 = $30400 - $146.65/yr Age 66 - 52% of coverage at age 65 = $20,800 - $100.34/yr Age 67 - 28% of coverage at age 65 = $11,200 - $54.03/yr Age 68 - 25% of coverage at age 65 = $10,000 - $48.24/yr 25% Value may continue for life with paid premiums

16 Billing Medical  Retirees are billed quarterly for any premiums owed by URI Employee Benefits Office  Spouses are billed quarterly by carrier Life Insurance  Retirees are billed annually by URI Employee Benefits Office May opt to have premiums deducted from retirement annuity monthly benefits only and through TIAA/CREF only.

17 Payouts Salary Deferred Plan Retirement Incentive (ends 6/21/08)  Tax-shelter

18 Available to those who had a reduction in salary in 1991 and 1992 100% of balance payable Example: Retiree has 29 days (29x8=232.0 hours)  Annual salary of $60,000/2080 = $28.8461 x 232.0 hours x 1.0656 = $7131.32  Determine value of your time: Number of days __________ x 8 = ___________hours available Annual Salary/2080 = $______________ (hourly rate) x ___________(hours above)x1.0656 = $__________ total value Salary Deferred Plan

19 Retirement Incentive Retirement Incentive equals 40% of salary at time of retirement. Plan will be discontinued after 6/21/2008  Employees may tax-shelter a portion of their incentive payout up to the maximum allowed by law (but may not exceed 75% of payout). Example (based on annual salary of $60,000):  Employee retires on June 21 th :  60,000 x 40% = $24000  Tax-shelter $18000, therefore, $6000 paid to employee less federal, state and FICA (FICA is withheld on 100% of payout) Determine value of your incentive payout:  June 21 th retire: $_______________ (annual salary) x 40% = $_____________

20 Retiree Health Options Q & A

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