Retirees and soon-to-be retirees learned more details about the upcoming changes to retiree health insurance from the University System of Georgia during informational meetings last week.
At each of three sessions, USG representatives and a representative from Aon Hewitt shared information on the plan that will provide supplemental health care coverage for Medicare-eligible retirees through a private retiree health care exchange instead of through the USG health care plan.
Karin Elliott, associate vice chancellor of total rewards for USG, told the audience that the focus of these sessions and presentations to other USG institutions is to answer questions and address concerns about the switch.
“We want to make sure that all of your needs are met,” she said. “That is very important to us.”
The new private retiree health care exchange, which will be managed by Aon Hewitt, is not part of the federal Affordable Care Act or public health insurance exchanges. The private exchange will offer a variety of coverage options, plans and providers. During the enrollment period of Oct. 1 to Dec. 31, retirees will work with licensed benefit advisors to select options that work best for them.
“It’s our priority and Aon’s priority that you have all the tools to make that decision (about a plan),” Elliott said.
With the changes, USG is setting up health reimbursement accounts for retirees. The funds put into these accounts will be used towards the payment of premiums and other out-of-pocket health care expenses.
A total of $2,736 will be deposited into a retiree’s health reimbursement account on Jan. 1. If a retiree’s spouse is Medicare-eligible and older than 65, that same amount also will be deposited so the couple would have a total of $5,472 in their joint health reimbursement account.
HRA funds roll over from year to year. Elliot said USG “decided to make reimbursement as flexible as possible.” Eligible reimbursement expenses include Medicare supplemental premiums, Medicare advantage premiums, Medicare Part D premiums, Medicare Part B premiums, vision and dental premiums, and out-of-pocket medical, vision or dental expenses.
To receive the HRA funds, a retiree must be enrolled in Medicare A and B and have enrolled in the USG plan for 2015. They also must purchase coverage through Aon Hewitt’s retiree exchange, which works with over 90 major insurance carriers.
USG retirees who are not Medicare-eligible will stay on the USG plan. Any spouses or dependents younger than 65 will remain on USG’s health plan. If the spouse is Medicare-eligible and older than 65, but the retiree is not, then the spouse will be subject to the change instead of staying on USG’s plan.
Moving forward, retirees will pay their premiums, which will vary based on the level of coverage and carrier they choose, directly to the insurance carrier. They also will pay any out-of-pocket expenses or copay/coinsurance costs. Then the HRA will reimburse those expenses either by check or direct deposit into a checking or savings account.
The reason the HRA system is being used instead of directly depositing the $2,736 into retirees’ checking or savings accounts is so that the funds are tax-free. The initial reimbursement could take up to 60 days, but after that each reimbursement will be received by the sixth of each month.
Travis Jackson, senior director for employee benefits at UGA, said that the university is in the process of establishing a retiree resource center.
“The purpose of this center is to help during the pre- and post-phone call phases of benefit enrollment,” he said. “We’re here to help with the logistics of the process and are dedicated to answering questions and helping with the transition to the exchange.”
Jackson said the center will not do enrollment but can help retirees ensure they have everything they need prior to or after their contact with Aon Hewitt.