Human Resources Development Compensation and Benefits Retiree Medical Insurance Plan (RMIP) Update October 16, 2014
Agenda Introductions Medicare Enrollment Overview Medicare Enrollment Requirement Reimbursement of Medicare premiums: policy on retroactive reimbursement Retiree Medical Insurance Plan (RMIP) Financial Review Pharmacy plan changes effective May 2014 (prior authorization, step therapy) Health Advisory Board (HAB) and Health Benefits strategy 2
Medicare Enrollment Overview RMIP Requirement RMIP members are required to enroll in the national health plan for which they: Are eligible, and Can participate on the same level as nationals of their country of residence. For RMIP members 65 and over, who are U.S. citizens or U.S. permanent residents, residing in the United States, the national health plan is U.S. Medicare. For most, Medicare Part B for medical services is available on the same level, even if contributions to U.S. Social Security were not made. Failure to enroll in Part B when eligible on the same terms as a U.S. citizen or permanent resident, may result in lower RMIP benefits. 3
Medicare Enrollment Overview Importance of Enrollment Coordination of RMIP and Medicare can result in 100% coverage depending on services Retiree enrollment in Medicare results in significant savings for RMIP RMIP savings contribute to lower premium increases for retirees Retirees are reimbursed for Medicare Part B premiums, including IRMAA, (but not late enrollment penalties imposed by Medicare) 4
Medicare Enrollment Overview Part A Eligibility and Part D Medicare Part A (hospitalization): U.S. citizens eligible if paid into Social Security for at least 40 quarters (10 years) Non-U.S. citizens may be eligible for coverage under a spouse who enrolls in Medicare If required to pay a premium for Part A at the time of enrollment, not required to enroll Medicare Part D (prescription medications) Members of the RMIP are advised not to enroll in a Part D program as the RMIP provides creditable coverage independently asserted to be as good as Medicare Part D. 5
Medicare Enrollment Overview Who to Notify Enrolled in Medicare Part A and/or Part B recently? Next steps: 1) Send a copy of your card to HR Operations. This will trigger your premium reimbursement the LATER of, the month the card is received OR the effective date of Medicare coverage. 2) Contact Aetna to setup Medicare Direct for easier claims processing/paperwork reduction More information is available online, www.worldbank.org/hrs Aetna Medicare team for WBG: 1-866-622-1035 Aetna member services for WBG: 1-800-723-8897 or mclaims@aetna.com 6
Stricter Enforcement of Medicare Part B Enrollment Requirement Aetna has been instructed to place medical claims in a pending status for U.S. retirees age 65 and older who do not have Medicare Part B on their record. Claim will close unpaid after 45 days unless Part B record is placed on file with World Bank. Or you alternatively request the claim processed as if Part B benefit had been applied. This action will reduce your RMIP benefit. Why was this action necessary? Another tool to help retirees understand and comply with this obligation of the RMIP, in addition to existing methods: Pre-Retirement Seminars and Ending Employment letters Annual plan letters www.worldbank.org/hrs Courtesy reminders to those nearing their 65 th birthday 7
Medicare Enrollment Overview Part B Eligibility Medicare Part B generally eligible if: Age 65 or older, and U.S. citizen, or U.S. permanent resident with at least 5 years of continuous U.S. residence, (even if part of those 5 years were in G4 status). Enroll during 3-month period before 65 th birthday Best to enroll as early as possible Make an appointment with Social Security Office (online application is not available for former G4) May defer enrollment in certain circumstances Failure to enroll on time can be costly as Medicare may impose a premium penalty of 10% per year for life and the RMIP will reduce your claims as if you had Medicare Part B as primary coverage 8
Human Resources Development Compensation and Benefits Pharmacy Plan Changes May 2014 October 16, 2014
Pharmacy Plan Changes May 2014 Prior Authorization (PA): What is PA?: Similar concept to healthcare plans that approve a medical intervention before it s done to ensure the appropriateness of the test / intervention. This program makes sure you re getting the medication that is suitable for the intended use. Certain medications may need a prior authorization. When the pharmacist tells you that your prescription needs a prior authorization, it simply means that more information is needed - your own doctor needs to be involved he / she can provide this information. 10
Pharmacy Plan Changes May 2014 Step Therapy: What is Step Therapy: A program for people who take prescription drugs regularly to treat a medical condition, such as arthritis, asthma or high blood pressure. In step therapy, drugs are grouped in categories, based on treatment and cost: Step 1: Front-line drugs - are generic and sometimes lower-cost brand drugs proven to be safe, effective and affordable. In most cases, you should try these drugs first because they usually provide the same health benefit as a more expensive drug, at a lower cost. Steps 2 and 3: Back-up drugs - are brand-name drugs (often more expensive) that generally are necessary for only a small number of patients. 11
Human Resources Development Compensation and Benefits RMIP Financial Update October 16, 2014
Plan Participation & Contributions Plan Participation Avg. Number of Retirees Avg. Number of Participants 2011 2012 2013 Per. Inc. 2011 to 2013 5,574 5,820 6,009 7.80% 10,244 10,714 11,047 7.84% Funding Funding Source 2013 Funding in Millions Retiree Contributions $20.20 World Bank Group Contributions $57.25 Continuation, Direct Billing & Long-Term Disability $1.88 Total Funding $79.33 13
Summary of 2013 RMIP Medical Plan Expenses in million USD Allowed Amounts 1 Coordination of Benefits Savings (COB) 2 RX Rebates & Subsidy Deductibles, Co-Payments & Coinsurance Total Expenses after Offsets Claims Medical Claims $70.79 $19.72 $8.60 $42.47 Dental Claims $10.53 $2.95 $7.57 Prescription Drugs Claims $21.03 $3.54 $2.57 $14.92 Total Claims $102.35 $19.72 $3.54 $14.13 $64.97 Medicare B Premium Reimbursement & IRMAA $6.79 $6.79 Admin.and Other Fees $3.66 $3.66 Total Cost Incl. Fees $112.80 $19.72 $3.54 $14.13 $75.42 Note: 1. Expenses before Medicare/NHP, Rebates, Deductibles, Co-pays, and Coinsurance 2. Coordination of Benefits (COB) are benefits submitted, but paid by another carrier including payments made by Medicare. The COB Saving amount shows the savings that the plan benefited by having COB in place. Data is based on Vendor report. 3. Numbers may not add up due to rounding ($0.1) 4. At the end of FY14, a surplus of $1.28M (retiree portion) was held to offset future increases in premiums. 14
Summary of 2013 RMIP Medical Plan Expenses U.S. Medical Plan Trends 2010 2014* U.S. Medical Plans 2010 2011 2012 2013 2014 Average Health care trends before plan and contribution changes 8.0% 8.0% 6.8% 6.0% 7.0% 7.2% Health care trends after plan and contribution changes 6.0% 5.4% 5.2% 4.1% 4.4% 5.0% RMIP Contribution Increases 2010 2014 Bank Group MIP and RMIP Contribution Increases 2010 2011 2012 2013 2014 Average Bank Active Employees 5.0% 13.3% 3.1% 2.0% 0.0% 4.7% Bank Group Retirees 0.0% 5.0% 3.1% 5.0% 2.2% 3.1% * Source: 2014 Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care 15
Human Resources Development Compensation and Benefits Health Advisory Board & Health Benefits Strategy October 16, 2014
Health Advisory Board A technical working group established by HRDCB 30 participants, including key stakeholders across business areas 20 hours over 7 meetings External expertise from Buck Consultants and Aon Hewitt 17
Health Benefit Strategy Two Main Drivers 1) Enhance the Employee Value Proposition: Support and improve health and wellbeing of members of the health plans Productivity improvements Increased level of equitability in establishing contributions to health plans both at premium and transactional levels 2) Improve Sustainability / Enhance cost efficiency: Empower members to become better informed, cost aware consumers of health care 18
Health Benefit Strategy Four Pillars: 1) Better health outcomes All health benefit strategy efforts to support this pillar strategy objective is to provide support / tools for a healthier WBG population 2) Financial efficiency Commitment from the Bank for required investment in health benefits Fiduciary accountability Enhanced consumer awareness and choice 3) Plan design and support components Relevant plan options supported by well designed support components (drug / disease management, wellness, onsite-health center) 4) Communication and Collaboration Following the example of HAB the health benefit strategy implementation follows a interactive approach to feasibility reviews, vendor selection and all aspects of communication to members 19
Thank You!