September 29, 2017 Dear Retiree: You should have received the City of Sacramento 2018 Open Enrollment packet in the mail. This letter is in follow up to that packet, specifically the information presented in section 6 of the cover memo regarding Medicare eligibility, per City labor agreements. As you know, retiree benefits through the City of Sacramento are negotiated and governed by labor agreements with our various Recognized Employee Organizations (REOs). Those agreements outline important information such as the City contribution and enrollment eligibility. Some agreements have language similar to the one listed below which is from the recently negotiated Sacramento Police Officers Association (SPOA) agreement: Upon achieving eligibility for Medicare benefits, retirees and their dependent(s) shall not be allowed to participate in any City-sponsored medical plan. As outlined in the Summary of Retiree Health Benefit Options Matrix provided with the Open Enrollment notice, Medicare-eligible retirees or beneficiaries from the following labor groups cannot remain on a City-sponsored medical plan per their labor agreement: Auto, Marine and Specialty Painters, Local 1176 (Unit 08) Plumbers and Pipefitters, Local 447 (Unit 07) Sacramento Police Officers Association (Unit 02) Unrepresented Employees (Units 09, 20, 21, 22 and 23) Western Council of Engineers (Unit 11) Our records indicate that you, or your spouse, retired from one of these units listed above. The various labor agreements can be viewed from the following webpage: http://www.cityofsacramento.org/hr/divisions/labor-relations. Please refer to the Employer- Employee Relations Policy for additional information which is also available on this Labor Relations website. Benefit Services 1
1) What This Means As a retiree or beneficiary ( retiree used for both in the remainder of this letter) in one of the units listed on page 1, your medical coverage for you and any covered family members is affected. If you are eligible for Medicare, then you and any covered dependents, even if they are not yet Medicare-eligible, will no longer be enrolled in a City-sponsored medical plan as of January 1, 2018. Currently, if you are under age 65 or otherwise ineligible for Medicare, only your Medicare-eligible dependents will be affected. For those currently enrolled in a Medicare plan, becoming ineligible for the City s plan creates a Special Election Period (SEP); this will allow retirees or dependents to enroll in an individual plan on a guarantee issue basis (no health questions) for up to 63 days after January 1, 2018. As a general rule, enrollment in a Medicare plan is effective the first of the month after paperwork is completed, so in order to prevent any potential lapse in coverage, it is strongly encouraged that all enrollment elections in an individual Medicare Advantage or Supplement plan be made no later than December 31, 2017. If you miss this opportunity to enroll in an individual plan, you may have to wait until the next Medicare Open Enrollment period next fall for coverage beginning in 2019. For dependents losing eligibility for City HMO coverage, they must enroll in an individual plan through an insurance carrier such as Kaiser, Sutter Health Plus or Western Health Advantage to continue medical coverage after January 1, 2018. Their coverage will also be on a guarantee issue basis (no health questions), and can be purchased directly with a carrier or through the applicable State or Federal Marketplace Exchange. 2) What Plan Options are Available to Medicare Retirees? Both Kaiser Permanente and Health Net offer individual Medicare plans retirees or dependents may enroll in with coverage beginning on January 1, 2018. Kaiser Permanente offers a Medicare Advantage plan, while Health Net offers both Medicare Advantage and Medicare Supplement plans. Retirees can also choose to purchase an individual plan through alternative health insurance carriers. If a retiree does not enroll in a Medicare Advantage or Supplemental plan, the retiree will have only Original Medicare (Parts A and B), which offers a different level of coverage than the City plans and does not provide prescription drug coverage without a separate enrollment in a stand-alone Medicare Prescription Drug Plan (Part D). Due to Medicare regulations, 2018 benefit plan designs and costs may not be available until mid- October 2017. Rates and details on these individual Medicare plans will be presented at an informational session dedicated to you and other affected retirees, on October 18 at 9 a.m. in Historic City Hall, Room 201. Kaiser and Health Net will present detailed information about their plans and how to enroll. There are additional opportunities to speak to City insurance carrier representatives throughout Open Enrollment, but they will be onsite until 4 p.m. on October 18 as we are hosting a Medicare Workshop and Benefit Fair after this informational session. Benefit Services 2
3) What Do I Need to Do? You must enroll in an individual insurance plan to continue medical insurance after January 1, 2018, for you or an affected dependent. Again, if you miss this opportunity to enroll in an individual Medicare plan, you will have only Original Medicare (Parts A and B) and may have to wait until the next Medicare Open Enrollment period next fall for coverage beginning in 2019. 4) Current Kaiser Members If you are currently enrolled in the City s Kaiser Permanente Senior Advantage (KPSA) plan, you will be automatically enrolled in the Enhanced Kaiser Medicare Advantage plan. If you are enrolled in Kaiser, an Opt Out Form is enclosed with this letter which must be returned to the City of Sacramento Benefit Services Division by November 17, 2017, only if you do NOT want to be enrolled in the Kaiser individual plan offering. If you have family members covered on the City-sponsored Kaiser HMO plan, they cannot remain on the City plan if you are no longer eligible to be on our plan. They will NOT be automatically transferred to an individual plan. Kaiser representatives, however, will be able to discuss individual plans and provide enrollment forms at the Benefits Fair on October 18. 5) Current Health Net Members To continue with an individual plan through Health Net, a new enrollment form will be required. Forms will be available from Health Net beginning on October 1 and will need to be returned to Health Net between October 15 and December 31. Forms received after December 31 will result in a lapse of coverage where Original Medicare will be primary. Representatives from Health Net will also directly contact members via telephone to help assist with questions, completion of paperwork and enrollment. If you have family members covered on a City-sponsored Sutter Health Plus (SHP) or Western Health Advantage (WHA) HMO plan, they cannot remain on the City plan if you are no longer eligible to be enrolled on a City plan. As discussed earlier in this letter, SHP and WHA also offer individual plans and representatives will be available at our Open Enrollment Benefit Fair to discuss individual plans and provide enrollment forms. 6) Individual Coverage & Medicare Workshops The Benefit Services Division is hosting an informational session dedicated to you and this transition to an individual medical plan. It is being held on October 18 from 9-10:30 a.m. in Historic City Hall, Room 201. Representatives from both Kaiser and Health Net will be presenting information on their individual plans and what they can do to assist with this transition. This session will be immediately followed by a general Medicare workshop in New City Hall, Room 1119. Our Open Enrollment Benefit Fair will take place that afternoon in the City Hall Plaza (outside between the two City Hall buildings) from 1-4 p.m. Come spend the day with us to get all your questions answered and complete any necessary forms. Benefit Services 3
7) Out of Area / In-Lieu Reimbursement If you are ineligible to remain on a City medical plan, you are still eligible for the City contribution and can remain enrolled on a City dental and vision plan. Any remaining contribution after electing dental and vision coverage can be used to reimburse you for your individual medical insurance premiums. Initial proof of your enrollment and monthly premiums is required to begin the monthly reimbursement, and is required annually thereafter. Attached is information on the Out of Area/In-Lieu Reimbursement program and a sample proof of coverage document. Beginning with your January 2018 coverage, you will be responsible for paying your monthly premiums directly to the carrier. The City will then send you a check toward the end of each month reimbursing you the premium, up to your allowable City contribution. Your first reimbursement check should arrive by January 31, 2018. 8) Additional Information and Resources For more information regarding Medicare, visit www.medicare.gov or call 1-800-MEDICARE (800-633-4227). You can also view a copy of the 2018 Medicare & You handbook online at https://www.medicare.gov/pubs/pdf/10050-medicare-and-you.pdf. Should you be unable to attend our information session, Medicare workshop or Benefit Fair on October 18, or have further questions, you can contact the carriers directly. Health Net (916) 861-8970 Kaiser Permanente (800) 464-4000 Sutter Health Plus (855) 315-5800 Western Health Advantage (888) 563-2250 You are welcome to attend the Medicare Workshop from 9 10:30 a.m. on Thursday, October 5, and the Open Enrollment paperwork lab directly after that from 10:30 - noon; however, as mentioned earlier, details for Medicare individual plans will not be available at that time. Free personalized assistance for a non-medicare plan, either through the Exchange or directly with a carrier, is also available through ehealth by calling their customer service line at (844) 298-4334 or online at https://www.ehealthinsurance.com/individual-family-health-insurance. For additional information or assistance, please contact the City of Sacramento Benefit Services Division at RetireeOE@cityofsacramento.org or by calling (916) 808-5665. Benefit Services 4
MONTHLY RETIREE CITY CONTRIBUTION IN LIEU OF CITY MEDICAL INSURANCE In the event a retiree moves outside the service areas of the City of Sacramento sponsored medical plans, the retiree may enroll in an individual medical insurance plan or a state or federal exchange plan, and the City will reimburse the retiree up to the available City contribution. Some labor agreements also allow retirees, regardless of location, to receive cash-in-lieu of a City retiree medical plan for reimbursement of individual medical premiums. In either case, the premiums must be for individual medical premiums and cannot be group premiums such as coverage through another employer as an employee or a dependent spouse. Medicare premiums are not eligible for reimbursement, but premiums for individual Medicare Supplemental and Advantage plans are. 2018 City Contribution 20+ YRS / *IDR 15-20 YRS 10-15 YRS (100%) (75%) (50%) UNDER 10 YRS Miscellaneous Retiree $300.00 $225.00 $150.00 $0.00 SPOA Retiree- Rep 02 $300.00 $225.00 $150.00 $0.00 MISC or SPOA (Retiree +1) $365.00 $273.75 $182.50 $0.00 Fire Retiree- Rep 05 (Retiree or Retiree +1) $834.73 $626.05 $417.47 $0.00 *IDR is an Industrial Disability Retirement / SCERS Retirement Type 2. Retirees on an IDR are eligible for 100% City contribution regardless of years of service or pension start date. To request retiree city contribution in lieu of City medical insurance, please do the following: Notify the City in Writing and include the Following Information Name, Address, Phone Number Retirement program name: PERS or SCERS Employee ID number or SSN Effective date of cancellation of City medical insurance AND Provide Proof of Health Insurance Showing the Following: Name of insurance carrier Name(s) of insured Effective date of new insurance Monthly premium Please refer to the attached sample. Mail to: City of Sacramento Human Resources, Benefits Division Attn: Denise Booth 915 I St, HCH Plaza Level Sacramento, CA 95814 The effective date of change will be the month after completed documents are received. Please contact Denise Booth at (916) 808-8462 with any questions or concerns. Benefit Services Division Revised 9-28-2017
SAMPLE
Kaiser Permanente Individual Plan Auto-Enrollment Opt-Out RETIREE NAME (Please print or type) DOB SSN or EMPL ID PHONE To be completed by Retiree ONLY if you do NOT want to be auto-enrolled in an individual Kaiser Senior Advantage Plan. I attest that effective January 1, 2018, I will no longer be covered under the City s retiree Kaiser Permanente medical plan. As part of the transition process, I have been offered to be auto-enrolled in a Kaiser Medicare Advantage individual plan; however I choose to opt out of this enrollment. I understand that by opting out, I will not be enrolled with Kaiser as of January 2018 and will need to seek an alternate plan. Signature: Date: 1