Board of Pensions Considers Win-Win Cost Savings Plan for Retiree Health Care
Over the last year the conference’s Board of Pensions has been looking at how to provide the best possible insurance to retirees, at the best possible cost. What they have been surprised to learn is that changes in the health care options can provide more service choices, and reduce costs for both retirees and the Annual Conference. According to Bill Mullette-Bauer, Conference Director of Stewardship and Finance, “it caught our attention when retires started turning down our insurance option and telling us they could do better ‘on their own.’”
Currently retirees receive health insurance that supplements their Medicare coverage from the conference’s health insurance provider, HealthFlex. The $340 per month cost for that insurance is divided between the participant and the conference depending on when they retire, and how many years of service they have at that time (Participants pay 25 - 100 % of the cost).
What research by the Board of Pensions has shown is that by turning to the open market for supplements to the Medicare coverage, retirees can find a wide range of plans that can be tailored to their family needs. Cost for these plans can range from $0 to $250 per month. By exercising their choice, retirees can choose a Medicare Supplement, Medicare Advantage, or MediGap plan that provides equivalent services to the current HealthFlex plan at a lower cost, with the added benefit of flexibility for the participant and cost savings.
According to Jamie Kienzle, Chair of the Board of Pensions, the board will be recommending to the Annual Conference Session in June “…that we use the principle of having a dollar stipend amount for a nontaxable Health Reimbursement Account for retirees to be available for the purchase of a supplemental health insurance plan and other medical costs. The Medicare Advantage plans or MediGap plans would be selected by the retirees effective in 2013 for all current and for future retirees.” Non-taxable Health Reimbursement Accounts can be used for all IRS approved medical costs, and any unused funds are carried over to the following year.
A major change for this proposal is that retirees will need to select, and pay for, their own Medicare supplement plan. Kienzle shared, “The Board of Pensions is concerned that all retirees and their caregivers understand the proposed changes.” The Board is planning to help with that process by holding a number of information sessions, having numerous mailings, and having text and video information on the conference website.
Full details of the plan, which would not be effective until January of 2013, will be presented to the Annual Conference in June. The Board of Pensions report will be posted online before the conference session for review. For more information, you can also contact Jamie Kienzle at email@example.com.