2016 Preview Guide. for both Medicare-eligible and non-medicare OPERS retirees

Transcription

1 pershealthcareplan 2016 Preview Guide for both Medicare-eligible and n-medicare OPERS retirees

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3 Table of contents Summary of health care changes OPERS health care plan coverage for n-medicare retirees OPERS health care plan coverage for Medicare-eligible retirees 5 The OPERS Medicare Connector -- the RIGHT choice for very good reasons 5 Medicare Basics 11 OPERS Medicare Connector Basics 20 What to expect between w and

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5 A message from Karen Carraher, Executive Director and Marianne Steger, OPERS Health Care Director Karen Carraher Marianne Steger We recognize that the upcoming changes to the OPERS health care plan can seem overwhelming. This guide will help you understand those changes better and will hopefully answer many of your questions. First, our under 65 population will continue to have the option of enrolling in the OPERS retiree health plan currently administered by Medical Mutual with drug coverage provided by Express Scripts. Second, our retirees who are already enrolled in Medicare, and those who will soon age into Medicare, will want to understand the OPERS Medicare Connector which will be operational in This preview guide summarizes the reasons we ve decided to introduce a Medicare Connector, provides facts pertaining to the Connector and is designed to address many of your questions. While the Medicare Connector is a significant change, keep in mind much of your health care is staying the same. For our Medicare retirees, 80 percent of their health care coverage will be paid by Original Medicare just as it is today. Currently, OPERS supplements Original Medicare coverage with our Humana/Express Scripts plan. So when we talk about the Connector we are talking about retirees picking the best plan to cover the 20 percent t covered by Medicare and a prescription drug plan. As you kw a number of the changes to our health care plan, which will be fully enacted by 2018, will increase costs for retirees as allowances may be reduced. Medicare Part B premiums will longer be reimbursed and premium allowances for spouses will be phased out. While these changes have saved our health care plan and preserved it long into the future, we recognize retirees will be impacted. We felt it was vital to find and offer more affordable options. The OPERS Medicare Connector does just that. The Medicare Connector provides retirees with affordable choices, but still provides one-on-one help in selecting a plan. Although OPERS is moving our Medicare population to a Connector, we will be an active part of the transition process. OPERS will stand behind the work of the Medicare Connector we choose and will be available to retirees should any problems arise throughout the process and beyond. We kw that health care is important to retirees and OPERS takes our responsibility as a retiree health plan sponsor very seriously. We make every decision regarding the health care plan with the good of the Retirement System and OPERS retirees foremost in our minds. We hope you read this guide in its entirety, but please keep in mind this information relates to OPERS retiree health care in In 2015, the health plan will operate in the same way it has for many years. In September, you will receive your annual health care open enrollment packet for 2015.

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7 Summary of health care changes In 2012, the OPERS Board of Trustees adopted a set of changes to the OPERS health care plan with the goal of creating a plan that could be sustained into the foreseeable future using available funding. The following summarizes the changes to the OPERS health care plan that apply to retired OPERS members. OPERS Medicare Connector In 2016, health care coverage for retirees and spouses age 65 and over and enrolled in Medicare Parts A and B will be purchased via the OPERS Medicare Connector. Participants will select a Medicare Advantage or Medigap (Medicare Supplement) plan and a Medicare D prescription plan on the individual Medicare market that best suits their needs. OPERS will continue to sponsor a health care coverage plan for retirees and spouses under age 65 and those age 65 and over but t eligible for Medicare Part A. Spouse coverage and allowance Non-Medicare spouses will have access to the OPERS retiree health plan at least through Premium allowances for all spouses will be phased out beginning in 2016 leading to a allowance in The OPERS Board of Trustees will reevaluate whether spouses continue to need access to the OPERS health care plan and if OPERS will continue to offer it. Beginning in 2016, spouses age 65 and over and enrolled in Medicare Parts A and B can use the OPERS Medicare Connector to select an individual Medicare plan and will receive an allowance in 2016 and By 2018, the allowance will be phased out to. Spouses can continue to use the Connector past These same rules apply to the surviving spouse of a deceased OPERS retiree. Allowance amount determined by age and years of service Beginning in 2015, the amount OPERS pays toward the total monthly cost of your coverage (allowance) will be based on your qualifying years of service at retirement and your age when you first enrolled in the OPERS health care plan. Monthly allowance amounts will range between 51 percent and 90 percent of the full monthly premium or the Connector base allowance. Members retiring prior to Jan. 1, 2015 with an allowance at or above 75 percent will t have an allowance below 75 percent. The change in allowance amount will be phased in over a number of years with the first reduction in 2016 leading to a full transition to the new allowance amount in Dependent child coverage Beginning in 2016, dependent children of retirees with 20 years or more of service at retirement will receive an allowance equal to 50 percent of the retiree s allowance percentage. If the recipient has less than 20 years of qualifying service, children (up to age 26) will transition to a allowance over three years ( ) and then be ineligible for OPERS coverage. Delayed enrollment Retirees may delay entry into the OPERS health plan. Beginning Jan. 1, 2014, the allowance will be determined based on a retiree s years of qualifying service at retirement and age at enrollment. Retirees who delay enrollment between ages 60 and 65 will gain 3 percent more per year towards their premium allowance amount at enrollment. 1

8 Summary of health care changes (continued) Medicare Part B premium reimbursement For those eligible, Medicare Part B premium reimbursement will transition to a reimbursement in 2017 with the first reduction occurring in reimbursement: $ reimbursement: $ reimbursement: $ and after: Voluntary withdrawal Retirees who voluntarily elect to withdraw from the OPERS health care plan on or after Jan. 1, 2014 may re-enroll, but only if they provide proof of creditable coverage in ather health care plan. IMPORTANT REMINDER: If you are currently receiving a Medicare Part B premium reimbursement, you will see the first reduction beginning in Since you are currently receiving this reimbursement as part of your monthly pension deposit, beginning Jan. 1, 2015, your deposit wil be $32.78 less per month than it was in Preview Guide

9 2016 OPERS health care plan coverage for n-medicare retirees In 2016, OPERS will continue to offer a group medical and prescription drug plan for retirees under age 65 and t yet eligible for Medicare Parts A and B. So far, a group health care plan is the most affordable choice for retirees t yet eligible for Medicare. If a more affordable option becomes available for the under 65 population, we ll do all we can to make that option available to our retirees. Eligible for Medicare Part B, but t for Medicare Part A? OPERS will continue to offer a coverage plan for those retirees eligible for Medicare Part B only. We are currently exploring options for this group to be able to use the OPERS Medicare Connector. More information will be available as we move closer to the 2016 implementation date. In the fall of 2015, n-medicare retirees will receive an annual open enrollment packet from OPERS explaining premium and coverage changes for Non-Medicare retirees and spouses will first experience a reduction in their monthly allowance amount in These amounts will be reduced again in Retirees will reach their new allowance amount after a final reduction in Spouse allowances will be reduced further in 2017 and then reduced to in

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11 2016 OPERS health care plan coverage for Medicare-eligible retirees The OPERS Medicare Connector the RIGHT choice for very good reasons Three things you will learn about the OPERS Medicare Connector by reading this Guide: Why an OPERS/Medicare Connector partnership is the right choice for OPERS retirees A basic understanding of Medicare and how the OPERS Medicare Connector will work What to expect between w and 2016 In 2016, OPERS will introduce a Medicare Connector for retirees enrolled in Medicare Parts A and B. When the Medicare Connector is implemented, OPERS will longer sponsor a group Medicare Advantage plan or a Medicare D prescription plan for Medicare eligible retirees. Instead, participants will select a Medicare Advantage or Medigap (Medicare Supplement) plan and a Medicare D prescription plan on the individual Medicare market that best suits their needs. There are many very affordable plans available on the individual market and the Medicare Connector will allow OPERS retirees access to more plan choices than ever before. Licensed benefits advisors are there to help you select the right plan that fits your needs to supplement the coverage provided by Original Medicare. Original Medicare covers 80 percent of medical costs and has daily deductibles for hospital stays. It also does t provide prescription drug coverage. These plans provide additional coverage to supplement the Medicare coverage. 5 Not everyone has the same needs when it comes to health care coverage and what s affordable for one retiree, may be too expensive for ather. But don t worry, you re t on your own in making this decision. The Medicare Connector offers one-on-one consultations to retirees enrolled in Medicare Parts A and B.

12 2016 OPERS health care plan coverage for Medicare-eligible retirees Not only will retirees be able to choose the right plan that benefits them and their budget, but eligible retirees will also be provided with a monthly Health Reimbursement Account (HRA) allowance to use toward the premium for their choice of individual Medicare plan. Any remaining allowance can be used towards the cost of any of the following: Medicare Part B premiums Although OPERS is moving our Medicare population to a Connector, we will be an active part of the transition process. OPERS will stand behind the work of the Medicare Connector we partner with and we will be available to retirees should any problems arise throughout the transition process and beyond. A spouse s premium Out-of-pocket medical expenses Future health care costs Three Reasons for partnering with a Medicare Connector Preview Guide The Medicare Connector will save retirees money and provide more choice Individual Medicare plans can offer more complete coverage The OPERS Plan was unsustainable

13 2016 OPERS health care plan coverage for Medicare-eligible retirees (continued) 1 The Medicare Connector will save retirees money and provide more choice While it may be hard to believe, plans offered through the individual Medicare market are more affordable than employer-sponsored, group Medicare plans including the current OPERS Medicare plan. The OPERS Humana/ Express Scripts Medicare Advantage Plan costs nearly $400 per month. A 74-year old retiree (the average age of our retirees) can buy a Medigap (Medicare Supplement) Plan F (the Medicare plan with the highest level of coverage) for less than $200 per month. On average, the costs vary with age with younger retirees being less expensive. For most retirees, purchasing a Medicare Part D drug plan will cost an average of an additional $39 per month. Retirees sometimes assume that OPERS is large eugh to get the best health plan rates. This is simply t true. While 145,000 OPERS retirees enrolled in Medicare is a substantial population, that is a very small number compared to the 50 million Americans enrolled in Medicare overall. Many of our retirees have already discovered that more affordable plans are available on the individual Medicare market and waived their OPERS coverage. The individual Medicare market is massive, highly regulated and very established. Using a Medicare Connector minimizes the financial burden on retirees and restores their individual purchasing power. Without the affordable options available through the Connector (and continuing to offer a plan similar to the current Humana/Express Scripts plan), by 2018 most OPERS retirees would have seen an increase of almost $200 a month for their health care costs. The Connector will provide access to affordable choices for retirees and the HRA allowance will provide financial support. When given the choice, would you rather pay $200 more a month or have your choice of more affordable plans? This increased cost of $200 or more would come from the following: 1 Premium share most allowances will go from 90% to 75% (increasing retiree s premium share by about $100 a month) 2 Elimination of Medicare Part B reimbursement (increase cost to retiree is $96.40 per month) On the Connector, costs on average for individual plans look like this: Medicare Advantage with prescription drug plans range between and $80 per month depending on the carrier and the plan benefits. These plans have lower premiums but higher costs when you access health care. Let s break it down 7 Medigap (Medicare Supplement) plans range between $80 and $280 per month. These plans have higher premiums but little or costs when you access health care. 3 Loss of spousal health care allowance. For some retirees, this will result in a cost increase of even more than $200. Medicare Part D prescription drug plans range from $10 to $100 or more per month based on coverage and deductible amounts. The average cost is $39 a month. You may have higher costs depending on your prescription drug usage.

14 2016 OPERS health care plan coverage for Medicare-eligible retirees (continued) Projected 2016 Medigap (Medicare Supplement) plans and benefits Medigap benefits Part A coinsurance and hospital costs* Part B coinsurance/copayment Blood (first 3 pints) Part A hospice care coinsurance/copayment Skilled nursing facility care coinsurance Part A deductible Part B deductible Part B excess charges Foreign travel exchange (up to plan limits) Out-of-pocket limit Average projected 2016 Monthly Premium age 70-74** (OSHIIP Medicare Guide) A N/A $139 B N/A $173 C N/A $194 D N/A $155 Medigap plans F N/A $191 G N/A $165 K 50% 50% 50% 50% 50% 50% 4940 $94 L 75% 75% 75% 75% 75% 75% 2470 $131 M 50% N/A $150 N N/A $138 *Up to an additional 365 days after Medicare benefits are used up. **Projected 2016 rates estimated using 4% annual inflation. Note: In the Medicare market, Plan F is the most popular plan with virtually outof-pocket medical costs Preview Guide

15 2016 OPERS health care plan coverage for Medicare-eligible retirees (continued) 2 Individual Medicare plans can offer more complete coverage The most popular individual Medicare plan is a Plan F Medigap (Medicare Supplement) plan. Plan F is offered at a lower rate than OPERS would need to charge for a comparable plan and provides more complete coverage than the current OPERS group Medicare plan. Retirees selecting a Plan F option will have deductibles or office visit costs. Plan F is available across the United States and has network restrictions. As long as your doctor accepts Medicare, visits will be covered under Plan F. Remember, Medigap plans do t come with a prescription drug plan. Retirees selecting Plan F coverage will also need to select a separate drug plan tailored to meet their specific prescription drug needs. Comparing our current medical plan to other Medicare plan options Member pays Projected 2016 rates for 74-year-old Current OPERS Plan Medigap Plans Plan F* Plan G* Plan C* Medicare Advantage with Prescription Drug Plan Typical MAPD Zero Dollar Premium Plan Premium medical and RX $414 $230 $204 $233 Annual deductible $250 $147 Office visits 4% $10 Specialist visits 8% $40 ER visit $50 $65 Urgent care $50 $10-$40 Preventive Outpatient 4% 20% $260 max 9 Inpatient 4% $260/day (days 1-7) Hospice 5% Depends on facility Out of pocket max $850 N/A N/A N/A $5,200 Part B excess charges** N/A covered covered t covered N/A *Projected 2016 monthly rates for a 74-year-old estimated using 4% annual inflation. Includes a $39 monthly prescription drug plan. **Any excess charge from a doctor who doesn t accept Medicare payment as payment in full (rare).

16 2016 OPERS health care plan coverage for Medicare-eligible retirees (continued) 3 The current OPERS health plan was unsustainable OPERS is committed to being proactive and offering a quality health care plan for as long as we are financially able. Due to rising costs, we knew we would t be able to sustain the health care program in its current format for more than 10 to 14 years. Change was inevitable. Simply put, our retiree population is expanding, plan participants are living longer, and health care costs continue to rise. In order to continue offering retiree health care coverage, OPERS made a number of key changes to the plan. These changes include requiring retirees to pay more for health care coverage and requiring active members to work longer in order to secure a health care allowance. These changes are designed to sustain the fund longterm, reducing the need for changes every couple of years. Our projections indicate that the plan changes will allow our health care plan to be sustainable into the foreseeable future. Because of these changes, we wanted to find more affordable options for retirees. These changes will benefit our retiree population both w and long into the future. Because health care is an emotional topic and change is often intimidating, moving to a Medicare Connector could be a difficult process for some. However, we re confident that we can help the process go smoothly and retirees will have a more comprehensive and affordable health care plan come OPERS is committed to being a partner for all our retirees Preview Guide

17 Medicare basics OPERS currently provides Medicare-eligible retirees with a Medicare Advantage plan administered by Humana. Participating in this plan has minimized the need for you to be informed on the details of Medicare. However, a basic kwledge of Medicare will be very helpful as you prepare to make an educated plan selection through the Medicare Connector next fall. Medicare costs vary depending on your plan, coverage, and the services you use. For many years, Medicare had two major parts: Part A for hospital insurance and Part B for medical - outpatient insurance. These parts are kwn as the Original Medicare Plan. In recent years, two additional parts (Parts C and D) were added. Following is a high-level break down of each plan. Medicare is federal health insurance for three groups of people: Those age 65 and older Those under age 65 with certain disabilities Those at any age with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant). 11

18 Medicare basics (continued) Medicare costs vary depending on your plan, coverage, and the services you use. For many years, Medicare had two major parts: Part A for hospital insurance and Part B for medical insurance. These parts are kwn as the Original Medicare Plan. In recent years, two additional parts (Parts C and D) were added. Below is a high-level break down of each plan: Medicare Part A This plan covers inpatient care in hospitals, skilled nursing facilities (under certain conditions), some home health and hospice care. Part A does t cover long-term nursing home or n-medical in-home care. To be eligible for coverage at cost, you need at least 40 quarters of Medicare Social Security credit. This means you and your employer paid for Medicare Part A through payroll deductions or you worked in a job covered by Social Security. Most public employees pay into Medicare even though they don t pay into Social Security. You may also qualify for Medicare Part A coverage through a spouse s work record if you do t have eugh quarters to receive Medicare Part A at cost. Medicare Part B This plan covers doctors services and outpatient care, other medical services that Part A doesn t cover (like physical and occupational therapists), and some home health (generally outpatient) services. Everyone is eligible to enroll in Medicare Part B once they reach age 65 (or have a qualifying illness or disability). It has a monthly premium based on income. Most Americans pay $ per month Preview Guide Medicare Part C Also kwn as Medicare Advantage Plans. Private companies such as Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO) and Private Fee-for- Service (PFFS) Plans provide both Part A and Part B benefits to eligible people who enroll. Many plans have additional coverage as well, including dental and vision. Our current plan through Humana is a Medicare Advantage Plan, but in many ways is structured more like a Medigap Plan. Medicare Part D Private companies contract with Medicare to provide coverage for generic, brand name and specialty prescription drugs at participating retail pharmacies and home delivery.

19 Medicare basics (continued) Most Medicare participants structure their health care coverage using one of the following three options: Options 1 Original Medicare Plan Medicare Part A (Hospital) Medicare Part B (Medical) 2 Original Medicare Plan Medicare Part A (Hospital) Medicare Part B (Medical) Prescription drug coverage Medicare Part D Note: If you do t choose a Medigap or Medicare supplement plan through the OPERS Medicare Connector, you will t receive an allowance from OPERS. Medigap plan (Medicare Supplement plan) 3 Medicare Advantage Plan Medicare Part C (Combines Part A, Part B) The Humana Medicare Advantage Plan (current plan for OPERS Medicare retirees) is an example of this type of plan although it is structured more like a Medigap plan. Prescription drug coverage Medicare Part D When the OPERS Medicare Connector is implemented, OPERS will longer sponsor a group Medicare Advantage plan or a Medicare D prescription plan. Instead, participants will be provided with an allowance to purchase a Medicare Advantage or Medigap (Medicare Supplement) plan and a Medicare D prescription plan on the individual market that best fits their lifestyle. 13

20 Medicare basics (continued) Before you can confidently select the individual Medicare plan that best suits your needs, you ll need to understand the Medicare Advantage (MA) Plans differences between Medicare Advantage and Medigap (Medicare Supplement) plans. Medigap (Medicare Supplement) Plans What is this plan and how does it work? MA plans are private health insurance plans that replace Original Medicare and must provide the same level of coverage that Original Medicare does. MA plans often provide additional coverage as well. Medigap plans are private health insurance that will supplement or fill in the gaps where Medicare Parts A and B leave an individual uncovered. (Medicare generally pays 80 percent after deductibles (annual and/or hospital) leaving the member to pay 20 percent of the cost of medical care after deductibles). How much will this plan cost? Medicare Advantage plans have a lower monthly premium ( - $80 a month), but often feature higher out-of-pocket costs for medical coverage. These plans have a higher monthly premium (around $80-$280 a month) but often have little or out-of-pocket costs for medical services. While monthly costs will be low, MA plan participants will have deductibles and co-pays for physician visits, hospital stays and testing. How do I kw if this plan is right for me? An individual must be enrolled in both Medicare Parts A and B before applying for a Medicare Advantage plan. MA plans are most appropriate for people who do t travel, have relatively few medical issues and do t frequently visit physicians or hospitals. An individual must be enrolled in both Medicare Parts A and B before applying for a Medigap plan. Most appropriate for people who travel or have medical issues requiring frequent visits to doctors/ hospitals. 14 Will my doctor be part of the plan? MA plans generally feature a network. Participants must utilize physicians and hospitals in their network for the best coverage so you will need to make sure your doctors are in the plan. The vast majority of Medigap plans do t have networks. Therefore, policy holders can utilize any provider who takes Medicare Preview Guide What about prescription drug coverage? Can I be denied coverage by the OPERS Medicare Connector? A prescription drug plan is often included with a Medicare Advantage plan. In that case, they are called MAPD plans. You cant be denied the opportunity to enroll in an individual MA plan through the Connector as long as you do so during the required open enrollment period (Fall 2015) or when you first turn 65 and become eligible for Medicare. Because Medigap plans do t provide drug coverage, individuals who select a Medigap plan also select a Medicare Part D prescription drug plan. Premiums range between $10 and $100 per month. You cant be denied the opportunity to enroll in an individual Medigap plan through the Connector as long as you do so during the required open enrollment period (Fall 2015) or when you first turn 65 and become eligible for Medicare. You cant be denied coverage by a Medicare Part D prescription drug plan. You cant be denied coverage by a Medicare Part D prescription drug plan. What if I want to change my plan after I have made my initial selection? Can I be denied coverage? You can always choose to switch from a Medigap plan to an MA plan. You will t be denied coverage based on a medical condition and you will t be subject to medical underwriting. If you want to switch from an individual MA plan to a Medigap plan, you can be required to undergo medical underwriting and can be denied coverage. If you wish to switch from one Medigap plan to ather, you may be required to undergo medical underwriting.

21 Medicare basics (continued) Selecting a plan that s right for you This is a big decision, but determining what type of individual Medicare plan best suits you can be made easier by considering the following items w, before you ll be asked to choose a plan next fall. But you won t be doing it alone. The OPERS Medicare Connector will be there to assist you in your selection. The Connector is staffed with highly trained Licensed Benefit Advisors that will guide you through your choices by asking you questions about your health care needs, prescriptions, physicians, specialists, travel, and more. You can also feel free to invite a support person (spouse, friend, child) to sit in on that discussion. Much like a broker can help you select an insurance policy that works best for you; the OPERS Medicare Connector Licensed Benefit Advisors is there to do the same. How can I be sure I am speaking to an authorized Connector representative? In the fall of 2015, OPERS will send you information about how to contact the OPERS Medicare Connector to make your Medicare plan selection. You will initiate the call, thus ensuring you are reaching an authorized Connector representative. The OPERS Medicare Connector will also continue to be there for you after your initial selection. The Connector staff will assist you with any issues that may arise. And, should you decide to switch to a different plan in future years, they can help to facilitate that change. As always, OPERS stands behind the OPERS Medicare Connector and can be of help in the resolution of issues. 15

22 Medicare basics (continued) To prepare for your first selection, some retirees have asked us what they can do to be ready, so we ve put together the following tips: Study what s available. No one kws your health status like you do and choosing a Medicare plan is an important decision. Do your research to help you understand all your options. Explore the official Medicare website ( Medicare books and the Ohio Senior Health Insurance Information Program (OSHIIP) at Don t forget to talk to your family and friends about the Medicare coverage they have w. And, of course, the OPERS Medicare Connector will help you at every stage. Being proactive will pay off. Understand you. While you re doing research, ask yourself these questions: How s my health- am I generally in good shape, or do I have a chronic illness? Do I take prescription drugs? If so, how often and how much am I paying? What doctors do I see and for what kind of care? Am I open to changing doctors? Am I an avid traveler- state side or abroad? Am I eligible for health care coverage outside of Medicare? How much did I spend on health care last year and what kind of budget do I anticipate for the future? Preview Guide Look for a good fit for you. Medicare plans are t one size fits all and each plan is unique. Consider the differences between Medigap and Medicare Advantage plans. Then 5) Act compare quickly your when needs the window to what s opens out and there you to find the plan that s right for you. become eligible for Medicare. Don t miss your initial Medicare enrollment period. Make sure your coverage begins when you want it to and avoid paying more in premiums because you waited. Look for help if you need it. There are a wide variety of resources available to you to get help in comparing and choosing plans. Did you kw that additional financial help is available with the costs of Medicare for those with lower incomes? If you think you might qualify, apply soon. Processing your application takes time and you ll want to find out if you re eligible, and the amount for which you ll qualify. Act quickly once you become eligible for Medicare. Don t miss your initial Medicare enrollment period. Identify when you want coverage to begin and avoid paying more in premiums because you waited too long.

23 Medicare basics (continued) The examples below discuss each retiree s allowance. For more information on the allowance OPERS will provide for those participating in the OPERS Medicare Connector, please see page 20. Meet Sam. Sam just turned 65 and is retired. He s in good shape and generally healthy. He takes a daily blood pressure prescription drug which costs him about $25 each month. Sam takes good care of himself and budgets for health care expenses accordingly. Sam s health care needs: Access to comprehensive health care services, including preventive care Coverage that provides a safety net in case of a serious illness Access to specialists if he needs them; he s okay staying within a plan s network Access to prescription drug coverage in case he needs additional medications at some point Sam chooses a plan to fit his lifestyle. He opts for a Medicare Advantage plan that includes prescription drug coverage (MAPD). To qualify for this plan, he must enroll in Medicare Part A and Part B. As part of this plan, he will continue to pay the Part B premium to Medicare. He enjoys a low premium kwing he may have out-of-pocket costs for npreventive medical care. Based on this scenario, Sam would likely have monthly allowance dollars remaining. Sam will save these funds for out-of-pocket expenses and future health care costs. Anne will be 65 next month. Her income is limited since he husband passed away so she s working part-time to earn extra money. Anne has heart disease and visits a specialist. The specialist has prescribed her a daily medication to help manage her illness. Because she s on a budget, she doesn t feel she can afford high out-of-pocket costs should she get sick. She also prefers t to change doctors. Meet Anne. 17 Anne s health care needs: Minimal out-of-pocket costs Access to her trusted doctors Discounted prescription drugs Anne chooses a plan that fits her best. She determined that a Medigap plan would be most beneficial to her needs and budgetary concerns. She also elected a supplement Medicare Part D prescription drug plan coverage. Anne s OPERS allowance will cover her monthly premiums. Anne will use her remaining allowance dollars for her Medicare Part B premium.

24 Medicare basics (continued) Meet Brenda and Carl. Brenda and her husband are both 70 years old. Brenda has diabetes and a heart condition. She has a number of doctors and wants to be sure she can continue seeing them with comprehensive coverage. Brenda s husband, Carl, is in excellent health. Brenda s health care needs: Access to her trusted number of doctors without worrying about out of network costs Prescription drug plan Carl s health care needs: Access to a full range of health care services, including preventive care Coverage that provides a safety net in case of a serious illness Access to prescription drug coverage in case he needs medications in the future Brenda selects a plan to fit her lifestyle. She chooses a Medigap plan and a standalone Medicare Part D prescription drug plan. With a Medigap plan, she kws all her doctors are covered because there is t a defined network of physicians. Carl picks a Medicare Advantage plan with Prescription drug coverage (MAPD) with monthly premium. He likes the benefits, but kws if he is hospitalized he will have deductibles to meet. Also, the premium they had been paying for the OPERS plan will longer be taken out of Brenda s pension check in Brenda and Carl choose to use the remaining OPERS Medicare Connector allowance dollars to pay for her Medicare Part B premium. They plan to keep the remaining allowance dollars in her HRA account to use toward deductibles and other costs if Carl was ever to be hospitalized Preview Guide Brenda and Carl Coverage costs Monthly allowance $ Medical plan cost - Brenda - $ RX plan premiums - Brenda - $ Medical and RX costs - Carl - $ 0 Total monthly remaining allowance dollars = $ Brenda and Carl Remaining allowance Total monthly remaining allowance dollars $ OPERS premium longer deducted in $ Medicare Part B premium - Brenda - $ Remaining monthly allowance for other health care expenses = $ Example does t include spouse allowance which will end in 2018

25 Medicare basics (continued) Meet Diane and Art. Diane is 74 and in great health. As a retired nurse, she took good care of herself. Her husband Art is 73 and has some health issues. Diane s health care needs: Access to health care coverage, should she need it Access to prescription drug coverage in case she needs medications in the future Low monthly cost Art s health care needs: Access to his full range of doctors Prescription drug plan that covers his prescriptions Low out-of-pocket costs Plan selections: Diane selects an MAPD plan that costs her $20 a month. She uses the balance of her $337 per month Connector allowance to pay for a Medigap plan for Art ($192 and a drug plan at $45 per month). She uses the remaining allowance dollars toward her Medicare Part B premium. Diane realizes she will have some out-of pocket medical expenses, but she is accustomed to these expenses because she had them while covered by the OPERS health care plan. Because Art chose a Medigap Plan F, he has almost out-of-pocket medical expenses. The premium they had been paying for the OPERS plan will longer be taken out of Diane s pension check in As a result, they can use the additional funds on her pension check to pay for the remainder of her Medicare Part B premium and out-of-pocket costs. Diane and Art Coverage costs Monthly allowance $ Medical plan - Diane - $ Medical plan - Art - $ RX plan - Art - $ Total remaining allowance dollars = $ Diane and Art Remaining allowance Total remaining allowance dollars $ OPERS premium longer deducted in $ Medicare Part B Premium - $ Remaining monthly allowance for other health care expenses = $ Example does t include spouse allowance which will end in 2018 In all of the examples listed here, using the OPERS Medicare Connector, these retirees will all take advantage of a counseling session with a Licensed Benefit Advisor to help them determine the right Medicare plan option for them. This representative would also enroll them in the plan.

26 OPERS Medicare Connector Basics Preview Guide As previously mentioned, when the Medicare Connector is implemented, OPERS will longer sponsor a group Medicare Advantage plan or a Medicare Part D prescription plan. Instead, OPERS will provide eligible retirees with an allowance to use toward the purchase of a Medicare Advantage or a Medigap (Medicare Supplement) plan and a Medicare Part D prescription plan selected through the OPERS Medicare Connector. Health Reimbursement Account allowance Beginning in January 2016, if you enroll in an individual Medicare plan using the OPERS Medicare Connector, you ll be provided with a monthly allowance deposited into a Health Reimbursement Account (HRA). An HRA will be provided through OPERS so that you can receive your health care premium allowance on a pre-tax basis. This requires you to pay your premium first and then seek reimbursement from your HRA. If we did t have you pay first and then seek reimbursement, we would be required by the IRS to tax your allowance. There will be auto-reimbursement options available that will minimize the length of time between paying your premium and receiving your reimbursement. Additionally, if you currently have a portion of your health care premium deducted from your monthly OPERS pension check, these deductions will cease, increasing the monthly amount of your pension. Allowance eligibility You are eligible to receive a health care allowance if you are currently eligible for OPERS health care coverage as a primary pension recipient. However, to receive an HRA allowance, you must meet two additional requirements: 1. Be enrolled in both Medicare Parts A and B. 2. Enroll in an individual Medicare medical plan through the OPERS Medicare Connector. Not eligible for Medicare Part A? OPERS will continue to offer a coverage plan for those retirees eligible for Medicare Part B only. We are currently exploring options for this group to be able to use the OPERS Medicare Connector. More information will be available as we move closer to the 2016 implementation date. $ The dollars and cents More than 90 percent of retirees will receive an HRA allowance of $337 a month or more. The amount of your HRA allowance depends on your years of service and your age when you first enroll in the OPERS health care plan. The monthly HRA allowance amount will range between $229 and $405 with more than 90 percent of current retirees receiving $337 or more per month.

27 OPERS Medicare Connector Basics By early next year, each retiree enrolled in Medicare Parts A and B will receive a personalized allowance statement explaining the allowance amount he or she will be eligible to receive. We anticipate that most retirees will have remaining allowance funds that could be applied towards Medicare Part B premiums, a spouse s premium or other eligible health care expenses w or in the future. Your account balance will roll over from month to month and year to year. If you are t eligible for Medicare Parts A and B, you will t be eligible for the Medicare Connector. However, OPERS will continue to offer a plan to retirees under age 65 who are t yet eligible for Medicare. Please see page 3 for more information about the OPERS health care plan for n-medicare participants. We will also continue to offer a plan to those retirees eligible for Medicare Part B only. Sample HRA activity My monthly allowance $337 Medigap Plan F (medical) -$191 Medicare Part D Plan (prescription drug) -$39 Medicare Connector Enrollment During the fall of 2015, if you are enrolled in Medicare Parts A and B, you will have the opportunity to select a health care plan that best meets your individual needs and budget via the OPERS Medicare Connector. You will receive personalized help choosing a plan that is right for you from a Licensed Benefit Advisor, but will enroll in a plan over the phone. Conducting enrollments by phone allows for the conversation to be recorded protecting the retiree. Ensuring retirees get the help they need In order to access your OPERS Connector allowance, you must enroll in an individual Medicare plan through the OPERS Medicare Connector. This allows OPERS to make sure all retirees have the opportunity to enroll in a plan. It also allows retirees to receive automated reimbursement for premiums and ensures high quality, lifetime support. Because OPERS will be partnered with the Connector, we can be certain all retirees receive the help they need. Remaining monthly account balance $107 How can I use my monthly remaining balance? 1. Apply it to your Medicare Part B premium 2. Apply it to your spouse s health care premium 3. Apply it to deductibles or other out-of-pocket health care expenses 4. Save it for future health care expenses 21

28 OPERS Medicare Connector Basics F Common questions about the OPERS Medicare Connector: Are retirees and/or eligible spouses required to use the OPERS Medicare Connector? No one is required to use the Connector. However, retirees who do t use the Connector to enroll in a medical plan will t be eligible to receive an HRA allowance from OPERS. Because this is such a significant change for our retirees, we want to ensure they are getting the best help possible and by using the Connector, we can mandate service and help for our retirees. Can an OPERS retiree use the Connector if he is t currently eligible for OPERS health care? Yes. However, the retiree will t receive an HRA allowance from OPERS. A Q Can my spouse use the OPERS Medicare Connector w and once their allowance is phased out? Yes. Using the OPERS Medicare Connector resources will help them access reasonably priced health care plans. It is important to te that one plan offered has premium. While this plan has higher out-of-pocket and point of service costs, it does serve as a very affordable option for many retirees. How will we kw the Licensed Benefit Advisor that contacts us from the Connector is t a sales call? The Centers for Medicare and Medicaid Services (CMS) does t allow sales calls for Medicare products to retirees. The OPERS Medicare Connector will call to schedule an appointment for the retiree to select a plan. The retiree must then initiate a call to the Connector for that appointment. This way the retiree can be certain that they are calling the OPERS Medicare Connector. In the coming year, OPERS will provide extensive communications educating retirees on the Connector enrollment process Preview Guide

29 OPERS Medicare Connector Basics When the OPERS Humana plan is closed at the end of 2015, can I be denied coverage by an individual Medicare plan through the OPERS Medicare Connector? As an OPERS retiree or qualified dependent enrolled in both Medicare Parts A and B, you cant be denied the opportunity to enroll in an individual Medicare plan through the Connector as long as you do so during the required open enrollment period. This practice is commonly referred to as guaranteed issue. Retirees have this same guarantee when they first recach age 65 and become eligible for Medicare. For OPERS retirees moving to the Connector, the open enrollment period will occur in the fall of If you fail to enroll during the open enrollment period, you could be subject to medical underwriting. Medical underwriting requires you to answer questions about your health status. Insurance companies can deny your coverage or charge you a higher premium based on the findings of medical underwriting. So don t miss out! What if I select a Medicare plan but want to change to a different one in the future? Once you are enrolled in an individual Medicare plan, rules for guaranteed issue and medical underwriting vary depending on the type of plan. All Medicare Advantage (MA) and Part D prescription drug plans are always guaranteed issue. You cant be denied insurance based on a medical condition. You will never need to go through medical underwriting when moving to a MA plan or a Part D drug plan, matter how many times you switch plans. If, after your initial enrollment period, you wish to switch from an individual MA plan to a Medigap plan, you can be required to undergo medical underwriting and you can be denied coverage. Also, if you want to switch from one Medigap plan to ather (after the initial enrollment period), you may be required to undergo medical underwriting. It is very important that you choose the Medicare plan that is right for you during the initial Connector open enrollment period in order to avoid any potential problems with guaranteed issue and medical underwriting. 23

30 What can I expect between w and 2016? Coming soon to your inbox or mailbox You will soon receive either an with a link or a DVD containing the OPERS Medicare Connector presentation by OPERS health care director Marianne Steger. Marianne has given the presentation to OPERS retirees across the state. The 35-minute presentation can also be accessed through on the OPERS home page at org. OPERS is committed to keeping you informed and prepared for each stage of the transition to the OPERS Medicare Connector in We will release new information about the implementation of the Connector as soon as it becomes available. Please visit org often for the latest information. Also, in the coming months, you can expect to receive the following mailings: enrollment materials November 2014 Ohio PERS News for Retirees with a Connector Readiness 2016 insert Early 2015 Eligible retirees will receive the OPERS Medicare Connector Toolkit including: Your personal Medicare Connector allowance statement 2015 OPERS Medicare Connector Calendar highlighting upcoming communications, educational opportunities and important enrollment dates and deadlines September 2014 Both Medicare and Non- Medicare retirees will receive 2015 open 24

31 Important Resources In addition to exploring the resources below, talk to your family, friends and neighbors chances are most of your peers have experience choosing a plan on the individual Medicare marketplace. Discuss with them what plan they chose and why it works for them. Medicare MEDICARE ( ) Ohio Senior Health Insurance Information Program (OSHIIP) Ohio Department of Insurance Consumer Services Medicare Fraud Reporting Pro-Seniors (also legal services) U.S. Dept. of Health & Human Services Office of Inspector General HHS-TIPS ( ) Ohio Department of Aging Ohio Department of Job and Family Services Ohio Medicaid Ohio Department of Health Social Security Administration

32 It is your responsibility to be certain that OPERS has your current address on file. If OPERS is t made aware of contact information changes, we cant guarantee that you will receive important information pertaining to your OPERS account. This publication is written in plain language to describe health care coverage under the Ohio Public Employees Retirement System. It is t intended as a substitute for the federal or state law, namely the Ohio Revised Code, the Ohio Administrative Code, or the Internal Revenue Code, r will its interpretation prevail should a conflict arise between it and the Ohio Revised Code, Ohio Administrative Code, or Internal Revenue Code. Rules governing the retirement system are subject to change periodically either by statute of the Ohio General Assembly, regulation of the Ohio Public Employees Retirement Board, or regulation of the Internal Revenue Code. If you have questions about this material, please contact our office or seek legal advice from your attorney. OPERS is t required to provide health care coverage to retirees or their dependents and will only do so at the discretion of the Board of Trustees. Ohio Public Employees Retirement System 277 East Town Street Columbus, Ohio Web opers.org Blog perspective.opers.org Facebook facebook.com/ohiopers Twitter twitter.com/ohiopers Photos credits: Maria Teijeiro, Digital Vision; IPGGutenbergUKLtd, istock; Ryan McVay, Digital Vision; shirosov, istock; Vstock LLC, VStock; monkeybusinessimages, istock; nyul, istock; TongRo Images; Cathy Yeulet, Hemera; AlexRaths, istock; AID/a.collectionRF; Goodluz, istock