The ‘BIG CHANGE’ for UMS Retirees

Changes are coming to the University of Maine Retiree Health plan.  Here, in this post, we’re giving you what we’ve been able to find out about the new plan so far, and to give you some additional color to what you can get from the published information.

If you want more information than what we have below, please feel free to reach out – or to contact the University Benefits Center at 207-973-3373.   You can also contact AON at 1-833-704-1028 or visit the microsite dedicated to this plan and transition at https://www.myexchangeconnection.com/universityofmainesystem

So, here’s what’s happening:

Through 2020…  

UMS Pays a portion of the monthly premium for Medicare-eligible retirees on a group plan (Aetna) 

Starting in 2021…  

You buy your own coverage through a healthcare marketplace.  UMS provides funding to reimburse costs.  

How does UMS reimburse costs? 

This funding comes in the form of a tax-free Health Reimbursement Account (HRA).  EVERY UMS Retiree will get the same amount in 2021 

• UMS Retirees get a $2,100 annual contribution 
• Retirees with a Medicare-eligible spouse (or other Medicare–eligible dependent) will receive an additional $800 for a total of $2,900. 
• Another HRA is available to reimburse all prescription costs any employee who goes over a certain level of medication expense. 

In order to get this reimbursement money, YOU MUST ENROLL IN YOUR PLAN THROUGH AON. 

Who is AON? 

Aon is a global company in the insurance, pension administration and healthcare plans business.  Their services are free to UMS retirees, because they receive commissions for writing the health insurance policies.  They have over 20,000 clients and have enrolled over 600,000 retirees in plans.   

Aon’s healthcare insurance exchange is a marketplace of over 90 insurance companies.  Their benefits advisors are salaried, so they have no incentive to put someone in one or another policy.  They have regional specializations (ie people in Maine will deal with someone who is a specialist in plans available in Maine). 

What do I do next? 

As of right now, nothing…  But if you’re Medicare-eligible and you haven’t yet enrolled in both part A and part B, go to ssa.gov to get that done. 

Eligible retirees will receive a mailed package from AON in late September.  It will include: 

• Your AON ID number 
• An “Appointment Letter”.  AON will set a date and time in October for you to speak on the phone with a benefits advisor
• A confirmation of your initial HRA amount
• A Medicare Insurance Guide 

ABOUT THE PHONE CALL 

• THEY CALL YOU.  You should call them upon receipt to confirm the appointment time and number.  If the time they sent doesn’t work, you can change it to something that does.
• Have all of the following information ready:
  • Your doctor/hospital
  • Your health conditions 
  • Any medications you take
• You can have AON conference another person in on the call (spouse, friend, etc.).  If you want your PFA advisor to be on the call with you, just reach out to us in advance so that we can verify the time and provide you with the best number to give AON. 
• The phone call with AON is optional.  You can do everything on the computer and the site serves as a virtual ‘Benefits Advisor’, where you can enter all of the information you’d be giving to an in-person advisor.  The website will provide plan recommendations and rank them from 0 to 100 on how well they’ll fit your needs. 
• You don’t need to go on the AON website.  Everything can be done over the phone. 
• OUR RECOMMENDATION:  Do Both.  Go onto the AON website, enter all of the information about your doctors(s), hospital, medications, etc.  The AON benefits advisor will help to fill in any of the gaps and should be able to add more constructive feedback on your plan options.  He or she will also make sure you’ve correctly dotted all I’s and crossed all t’s – and you don’t have to wait for them to take down all your information.  Also, there are some plans (AARP-endorsed plans from United Healthcare) that will not show up on the website, but that the benefits advisor can send you information on if they’re appropriate. 

IS THIS A GOOD THING OR A BAD THING? 

Change is never easy or fun.  Obviously, one of the reasons for this change is UMS’s need to rein in costs and group plan premiums are going up. As a UMS retiree, your workload in making sure you’re properly covered is about to go up. 

In the end, though, we suspect that this is going to work out well for most retirees, and that many will actually realize some amount of cost savings.  This change represents a movement from a ‘one-size-fits-all’ group plan to individual plans designed specifically to meet the needs of the individual. 

Much in the same way that the movement from Defined Benefit Pension plans to Defined Contribution Plans (like the TIAA plans you’ve all become used to) has introduced both complexity and ‘consumerism’ when it comes to retirement plans, the same trend is playing out here.  Like with retirement plans, there will be winners and losers.  It pays to make sure you’re doing it right, so the University’s decision to connect with a strong resource like AON is, in our opinion, a constructive step toward providing retirees with the support they should expect. 

We hope you’ll take the time to provide us with feedback on your experience.  Is the process relatively painless?  Are there things you’re finding yourself unprepared for?  Are you able to save money with the new structure, or will you be paying more?  Anything you can add to our knowledge base will be used to solidify our capacity to help in guiding people through the process, and to incorporate the new Retiree Health scheme into the overall financial plan. 

IMPORTANTLY, This is OUR TAKE ON THINGS.  It’s not the official word.  Contact the Employee Benefits Center at 207-973-3373 for that.  You can also call AON any time  

SOME ADDITIONAL INSIGHTS, FACTS, and FIGURES 

The three basic types of plans available are:  Medicare Advantage (Medicare Part C), Medicare Supplement Plans, and Prescription Drug Coverage (Medicare Part D). 

Some Medicare Advantage Plans cover vision, hearing, and / or prescription drug coverage. 

Premiums for Medicare Advantage Plans are pretty low.  A lot of these plans actually have zero premiums. 

Medicare Supplement plans (also known as MediGap plans) are sometimes more expensive, but they tend to cover nearly everything and substantially reduce out-of-pocket reimbursable expenses.  People with substantial health concerns, such as advanced stage cancer, might do well to consider these plans. 

Right now, there are 20 different HMO/PPO Medicare Advantage plans to choose from in the Bangor area on the AON exchange.  There are 22 different prescription drug plans to choose amongst. 

Different geographical areas will have different Medicare Advantage plans available.  Medicare Supplement plans, on the other hand, are standardized across the state in which you live. 

Prescription plans mostly cost around $35/month.  Even if you don’t feel you need prescription coverage, you should consider having it.  Reason:  If you don’t have coverage and go to add it in the future, your rate goes up because there’s a surcharge.  Better to pay around $13/month for a barebones plan and keep in going 

The current Aetna retiree plan is what is considered ‘Credible Coverage’ for purposes of avoiding the Part D surcharge when you enroll. 

Prescription Drug Plans (part D) follow a standard formula.  

• Initial coverage (after you’ve met your deductible – some plans have a $0 deductible), then.. 
• Coverage Gap (the ‘Donut Hole’) – for the year 2020, this starts at $4,020 in costs after which you pay 25% of the costs, then… 
• Catastrophic Coverage – after you’ve paid $6,350 (in 2020), you’re only on the hook for 5% of your costs.  And with the extra HRA in the new plan, you’ll be reimbursed that 5%. 

For the HRA, you can’t pay expenses directly from the HRA.  You pay them out-of-pocket and get reimbursed.  However, you can set up automatic reimbursement for your plan premiums. 

If both spouses are UMS Medicare Eligible Retirees, they’ll both get their own $2,100 HRA allowance.  If one uses up theirs, the other spouse’s allowance can be used.  Any unused HRA dollars roll over to the following year. 

You can’t put more money into the HRA.  Unlike an HSA, this can only accept money from the University System. 

This initial enrollment period represents an opportunity to join without medical underwriting, just like you get when you initially turn 65.  You can change Medicare Advantage plans annually without medical underwriting.  Most Medicare Supplement plans have underwriting if you change, but you don’t have any restrictions on how often you change.  If you do change to a Medicare Supplement plan from a Medicare Advantage plan, you have up to three years to switch back to a Medicare Advantage plan and not be subjected to medical underwriting. 

Plan premiums for 2021 will be available October 1.

If you have Tricare (Military benefits), let your benefits advisor know in order to avoid getting into a plan that could compromise your Tricare benefits. 

Each year, you’ll go through another Annual Enrollment Period (AEP) which runs from October 15 to December 7.  For UMS retirees this year, though, you have through 12/31/2020 to enroll! 

The AON Benefits Advisors are there to support you ongoingly.  If you have a dispute with the insurance company, they will pursue it for you.