Retiree Health Benefits – An Important Update
The July 11th edition of MiddPoints included an article describing exciting changes, effective January 1, 2019, to the way Middlebury provides healthcare insurance access (medical, dental and vision) to our retirees. This article provides a review of those changes as well as an update on the transition of our current retirees.
In a Nutshell – What’s Changing?
Effective 1/1/19 Middlebury retirees (age 65 and up) will be provided access to a wide variety of Medicare supplement and Medigap policies through Middlebury’s new partnership with Via Benefits. This approach (as well as state insurance exchanges for early retirees) replaces our current group retiree benefit offering.
Historically benefits-eligible faculty and staff who retire* from Middlebury have been offered the opportunity to remain on our group health benefits (medical, dental and vision), post-retirement. However, to do so they must pay the full monthly retiree insurance premiums. Remaining on Middlebury’s health benefits as a retiree has had its pros and cons:
- On the plus side:
- Retirees are familiar with our plan design, and
- Human Resources is here to help when questions or concerns arise.
- On the negative side:
- Our medical plan is very expensive compared to the cost of comparable plans that are specifically designed for retirees (this price differential is primarily because of federal subsidies available to specifically designed retiree plans as well as special drug pricing for which we are not eligible), and
- Retirees have only one option each for medical/Rx, dental and vision insurance which may or may not be a good fit for retirees and/or their dependents.
Over time, as the retiree health plan marketplace has evolved, more and more of our retirees have realized that Middlebury’s one-size-fits-all approach does not fit all. For many years retirees have complained about the high cost of our benefits and asked for more cost effective alternatives, which, unfortunately we were unable to provide. Eventually, three quarters of eligible retirees dropped out of our plans and instead purchased coverage on the individual market, where there are many plan designs to choose from, and at lower costs.
While those retirees who went out on their own were able to take advantage of the myriad of coverage and price options available, we are well aware that venturing out, solo, to comparison shop for health insurance felt like a daunting ordeal to many, and so about a quarter of our retirees didn’t do so.
What prevented Middlebury from coming up with a suitable solution for our Medicare-eligible (65+) retirees in the past? In brief, many factors made a viable alternatives elusive, including: the relatively small size of our retiree population (only a few hundred), the self-insured style of our group plan (which works great for a large, active employee population, but not as well for a small retiree population), a geographically dispersed group (a good number live here in VT, but others are sprinkled throughout the country), a tendency for our retirees to travel abroad, and an expectation for a high-touch level of personal customer service (such as retirees currently receive from Human Resources).
*To qualify as a Middlebury retiree an employee must have worked for at least 10 consecutive years – in a benefits-eligible position – past the age of 45.
At Last – A Solution!
We are thrilled to have recently found a solution that we believe will meet the coverage design, choice, cost and customer service needs of our Medicare-aged retirees! And so, effective January 1, 2019 Middlebury will replace our self-insured retiree group benefits for age 65+ retirees and dependents with coverage access through Via Benefits, the comprehensive Medicare marketplace operated by Willis Towers Watson (WTW). We are confident that the enhanced value, flexibility, choice and personal support our current and future retirees will be receiving from WTW/Via Benefits will be a great improvement over what we currently offer in-house.
WTW/ViaBenefits – Options and Expertise
WTW is a leading global company, with roots going back to 1828, that helps clients around the world with benefits and other advisory and brokering needs. While WTW is involved in many businesses, it’s Via Benefits division is focused exclusively on helping retirees obtain coverage that is designed to work in conjunction with Medicare. Via Benefits services can be roughly categorized in two parts: insurer vetting/management and retiree customer service. Via Benefits thoroughly scrutinizes national and regional insurance companies that provide Medigap, Medicare Advantage, Medicare Part D as well as dental and vision plans. Every insurer they contract with has been thoroughly vetted on, among other factors: plan design, geographical coverage, provider networks, drug formulary, customer satisfaction and price. Nationwide Via Benefits has relationships with over 100 leading insurance providers including: BCBS, MVP, CIGNA, United Healthcare, and AARP.
WTW/Via Benefits – Personalized Service
Via Benefits believes that providing customized, personal service to retirees is just as important as managing insurers. They have a dedicated group of licensed and certified Benefits Advisors (BAs) who are experts not only on Medicare supplemental policies but also have extensive training on working with their exclusively retiree customer population. The BAs servicing our account have been specifically certified to speak with the Middlebury retiree population. BAs are “carrier agnostic”, in other words there is no incentive for them to guide a retiree towards one product over another – instead their mission is to: educate retirees on the various types of available coverage, seek to understand each retiree’s (and dependent’s) healthcare needs and preferences, help each retiree choose the coverage that best meets his/her needs, and then remain available to support retirees on an on-going basis. Advisors spend, on average, 90 minutes on initial one-in-one phone calls with retirees to make sure they gain a full understanding of that individual’s needs before jumping to recommending plan options. They look broadly at each individual situation – does the retiree have high prescription utilization? Does he/she travel frequently, or spend winters in another state? Is keeping the same health care provider important? Is the retiree looking for a plan similar to Middlebury’s or open to a different type of plan design? Importantly, support from a Benefits Advisor won’t end once a retiree has enrolled in a plan – throughout the year an Advisor will be available to assist with questions related to retiree coverage, much as Human Resources staff currently do.
The number and variety of plans – as well as the costs – will vary state to state, but as an example in Vermont there are approximately a half dozen Medicare Advantage options, and a dozen and a half Medigap and Plan D options to choose from – ALL of which are less expensive than Middlebury’s current retiree plan!
What About Early Retirees?
Early retirees – those who retire before age 65 – will not qualify for WTW ViaBenefits services until they reach Medicare age. Although we have a substantial number of early retirees very, very few full-pay early retirees have joined our plan since the implementation of the state insurance exchanges several years ago. The state exchanges provided such an attractive alternative that, on average, over the past several years we have had only one early retiree paying full price remaining on our group plan. (Options and pricing vary by state but generally there are numerous options available, at different price points, and many states offer subsidies to lower-income residents, making this a very attractive option.)
Transitioning Current Retirees
Human Resources has been working closely with retirees for the past several months as we make this important transition. Each retiree enrolled in Middlebury’s medical, dental or vision plan received a personalized letter in early June, notifying them of the change, and what to expect. In September a representative from Via Benefits was onsite and gave two presentations for retirees regarding Via Benefits’ approach to retiree health insurance access. Both sessions were very well attended and the feedback was overwhelmingly positive. The presentation was made available virtually for those unable to attend in person, and was recorded and a link made available to those unable during the live sessions. As of October 1st Benefits Advisors have been available to assist Middlebury retirees made their plan selections for 2019 and so far the process seems to be going very smoothly. We are hearing very positive feedback on the plan options, prices, and the services available through Via Benefits. For example, a retiree contacted HR last week to let us know that he had been able to speak with a Benefits Advisor the first day he made contact with Via Benefits and, with his Advisor’s assistance, was able to select and enroll in suitable medical, dental and vision plans, all in a single call. In describing his experience the retiree said of the Benefits Advisor, “… he was clear, courteous and patient, a credit to Via [Benefits]”.
Human Resources will continue to stay in contact with our retirees throughout the next several weeks, providing assistance as necessary, to ensure a smooth transition to this important segment of the Middlebury community. Whether you are an active faculty or staff or a current retiree please don’t hesitate to reach out if you have questions or would like to learn more about these exciting changes! I can be reached at 802-443-5465, or by email at email@example.com.
Related Topics: Sick Leave Reserve/Faculty Leave Reserve Conversion
While this article specifically addresses benefits for current retirees who are paying full premiums for medical, dental and vision insurance, I will add a brief update on a related topic: Sick Leave Reserve (SLR)/Faculty Leave Reserve (FLR) Conversion and the “free period” of retiree coverage.
Employees may recall that under our SLR Conversion benefit staff who have unused Sick Leave Reserve (SLR) and Faculty with unused Faculty Leave Reserve (FLR) at time of retirement are entitled to a period of Middlebury-paid retiree medical and/or dental coverage. Given that beginning next January retirees will no longer be on our group health plans we will not be able to provide the benefit in the same way as we currently do, so the method of providing the benefit has been reimagined. Starting in 2019 when employees with SLR or FLR retire Human Resources will set-up a special account, called a Health Reimbursement Account, in the new retiree’s name. The account will be funded with an amount calculated under the new SLR/FLR formula and the retiree will be able to access funds in that account to pay premiums for whatever insurance plan s/he has selected (through Via Benefits, COBRA, a state exchange, or (where allowed under state law) private insurance). Watch for more details on the new SLR/FLR Conversion Benefit in an upcoming MiddPoints article!