Answers to Health Care 2022 questions
This month: Learn the basics of OPERS’ new Pre-Medicare coverage
By Michael Pramik, Ohio Public Employees Retirement System
March 31, 2021 – As we draw nearer to 2022, and the changes that will affect OPERS retirees next year, we will periodically post questions and answers to key topics we believe will benefit our members.
Q: Why does OPERS need to make changes to the current Pre-Medicare group medical plan?
A: The OPERS group medical plan has become unsustainable because of the high cost of coverage and the status of OPERS’ pension funding. All money that would be available to fund health care, which could come only from the contribution of employers, must go toward the pension fund. Projections indicate we will not be able to contribute money to our Health Care Fund for more than a decade. By switching from a group medical plan to a Health Reimbursement Arrangement (HRA), OPERS will be able to continue offering current and future retirees assistance with the cost of health care coverage.
Q: What sort of plan will be available to Pre-Medicare retirees beginning next year?
A: Effective Jan. 1, 2022, OPERS will no longer offer a group medical plan. Instead, we will provide eligible Pre-Medicare retirees with an opportunity to opt in to an HRA and receive monthly deposits from OPERS. Retirees can use the funds within their HRA to be reimbursed for qualified medical expenses for both the retiree and their eligible dependents, including monthly premiums for the medical plan of their choice.
Q: What is a Health Reimbursement Arrangement?
A: An HRA is an account funded by OPERS that provides tax-free reimbursement for qualified medical expenses such as monthly insurance premiums, deductibles, co-insurance and copays incurred by eligible retirees. Via Benefits will administer the HRA.
Pre-Medicare retirees can use their HRA to get reimbursed for qualified medical expenses. Only OPERS can contribute funds to the HRA. Retirees cannot add their own funds. Pre-Medicare retirees must submit a request for reimbursement including supporting documentation for Via Benefits to approve and release the money from the HRA into the retiree’s personal bank account. Expenses are determined eligible for reimbursement based on IRS guidelines.
Q: What is Via Benefits?
A: OPERS has partnered with Via Benefits to create the OPERS Pre-Medicare Connector. Via Benefits Insurance Services, founded in 2004, has helped more than 2 million people evaluate and enroll in individual health insurance. Via Benefits is a resource offering personal service to help retirees understand coverage options through a robust online experience supported by a customer service team. It operates the first and largest Medicare marketplace in the country and, in 2014, expanded to include individual and family plans for Pre-Medicare retirees.
Q: Will Pre-Medicare retirees select a new plan through OPERS?
A: No. Pre-Medicare retirees can enroll in any medical plan they choose for 2022. Although it’s not required, we highly recommend that retirees explore their coverage options with the OPERS Pre-Medicare Connector. Via Benefits is a resource that helps retirees understand and navigate individual and family health plan options.
Via Benefits isn’t an insurance carrier. It’s a company that provides:
- Education, support, and assistance to retirees and their dependents when selecting and enrolling in an individual or family medical plan
- Financial consulting — Via Benefits will help Pre-Medicare retirees understand their funding options. If a retiree qualifies for a federal subsidy, Via Benefits will walk the retiree through a side-by-side comparison to help them decide between taking advantage of the federal subsidy or using the OPERS HRA.
- HRA administrative services
- Ongoing retiree support after medical plan enrollment
Q: How much money will OPERS deposit into an individual’s HRA?
A: Monthly HRA deposits will vary depending on the age when the retiree first enrolled in the OPERS Health Care Program and their qualifying years of health care service credit at retirement. The allowances will range from 51 percent to 90 percent of the base allowance amount. The Pre-Medicare base allowance amount will be $1,200 for the first three years, from 2022 through 2024. It will be re-evaluated based on market conditions and funding. Retirees can determine their allowance percentage and monthly HRA deposit amount in 2022 by visiting the Health Care 2022 page on OPERS.org.
OPERS also will provide a one-time, $1,200 transition deposit this fall for retirees who are enrolled in the OPERS Pre-Medicare group medical plan as of Dec. 1, 2021, and have opted in to the HRA. This transition deposit is designed to help defray up-front costs associated with enrolling in a new medical plan.
Q: Will retirees receive HRA deposits for dependent children?
A: No. Dependent children will not receive an allowance effective Dec. 31, 2021, when OPERS no longer offers the current Pre-Medicare group plan. However, retirees will be able to use HRA dollars to be reimbursed for qualified medical expenses incurred by eligible dependents.
Q: If a retiree has primary health care coverage with another Ohio Retirement System, will they be able to receive HRA deposits if they also meet OPERS health care eligibility requirements?
A: Yes. Pre-Medicare retirees will receive HRA deposits from OPERS once they’ve opted in to the HRA through Via Benefits this fall. Having health care coverage through another Ohio Retirement System will be no different than enrolling in health care coverage through the OPERS Pre-Medicare Connector, healthcare.gov, or a private insurance company.
For more information on this transition, visit the Health Care 2022 page at opers.org. Also, plan to attend a Retiree Health Care Under 65 webinar. This webinar was updated with new information in February. If you have attended one of these sessions, you may consider attending again this year. Visit the Member Education Center at opers.org to register. All webinars are also available as Recorded Presentations to watch at your convenience.
Michael Pramik
Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.
OPERS should be doing everything possible to make certain eligible retirees can “opt in” and arrange for alternate medical plans as soon as possible. Obviously we should research potential plans on our own for now, but the sooner we can sign up for the HRA and narrow down a medical plan the better.
In my view, waiting until open enrollment time could be cutting it too close and could greatly increase the chances of unforeseen problems occurring. Starting the process now or very soon would reduce the likelihood of OPERS getting slammed with calls later from confused and frustrated retirees.
What about vision, dental, and pharmacy benefits management? Will any or all of these still be available or will they all be absorbed into the new health reimbursement arrangement?
Mitch,
In 2022 OPERS will continue to offer the vision and dental programs as we do now. The medical and pharmacy will not be offered. Thanks MS
Does repetition make it true? Could you save a little of our money by cutting back?????
Let me first begin by saying I don’t care whether you offer an HRA or now. However, if you are taking money from the employer contributions to provide an HRA, how long do you feel this will be sustainable? I am trying to plan for retirement in 8 years and I’m thinking I should plan on paying the entire amount on my own as I don’t trust OPERS to make the correct decisions for future sustainability. You need to cut off the allowance now or begin being honest with members so they can do their future planning.
When I was hired and opted into OPERS, I was told (by OPERS reps and my employer) that all of my health care would be covered when I retired, and I would receive a 3% COLA each year on my pension (not compounded). Neither has or will happen! However, I have always planned on eventually having to pay my entire health care premiums. Life is full of changes, that’s for sure! Good luck with planning for your future.
Michael
I will be 62 in April of 2022 I will be receiving about $1,058 in an allowance so I will be collecting this for about 3 year before I turn 65. My question is if there is any money left in this Pre Medicare HRA at the age of 65 does it transfer over to the new HRA account when I become Medicare eligible ?
Thank you
Frank
Frank,
Yes those funds would still be available when you become eligible for Medicare.
Once I start getting medicare at 65 will I still receive same amount deposited in my HRA that I get now?
Elizabeth,
No, that amount will change. We will further address your question in a blog this week.
Will retirees be able to request that the monthly insurance premium previously paid from their pension benefits be included in their HRA. The collective state and federal taxes that the membership will pay on the additional income, will be regrettable.
After a preliminary “apples to apples” research effort on the price of medical insurance, the amount provided will not cover the price of similar insurance now offered. Why not offer a voluntary option to include the previous monthly premium paid by the membership into a reimbursable HRA? This would alleviate the additional tax burden that OPERS will be passing onto the membership, and help offset the cost of purchasing insurance in the private marketplace? Thank you in advance for your thoughts.
Steven,
The health care premiums that OPERS currently deduct from the members benefit payments are deducted post tax, it does not change the taxable income. Thanks MS
Will my my spouse be eligible for group plan rate under 2022 OPERS guidelines?
Frank,
Starting 1/1/2022 OPERS will no longer offer a pre-Medicare medical/pharmacy group plan. Our Pre-Medicare benefit recipients that are eligible for health care will receive an allowance that will be deposited into an health reimbursement arrangement (HRA) to be reimbursed for health care qualified expenses for the member and qualified dependents. Thanks MS
Will retirees be able to request that the monthly insurance premium previously paid from their pension benefits be included in their HRA. The collective state and federal taxes that the membership will pay on the additional income, will be regrettable.
After a preliminary “apples to apples” research effort on the price of medical insurance, the amount provided will not cover the price of similar insurance now offered. Why not offer a voluntary option to include the previous monthly premium paid by the membership into a reimbursable HRA? This would alleviate the additional tax burden that OPERS will be passing onto the membership, and help offset the cost of purchasing insurance in the private marketplace? Thank you in advance for your thoughts.
Steven,
Funds that came from your pension benefit to pay your share of group health care coverage will go back into your pension benefit. There is not an option to divert that money to an HRA.
Hi, I’m enrolled under my husbands health insurance – until he retires in a couple of years. Will I still be eligible for HSA using the plan i’m on now?
Cindy,
A pre-Medicare benefit recipient will opt into the Health Reimbursement Arrangement (HRA) during open enrollment this fall for 2022 they would be required to opt into the HRA to be eligible to receive the monthly deposits.
Thanks MS
Are you going to take the money out of my monthly benefit, that’s paying for my health insurance now? Or do I use it to purchase another health insurance somewhere else?
Amy,
Starting 1/1/2022 OPERS will no longer offer the Medical Mutual group plan and you will no longer have the monthly premiums deducted from your OPERS benefit.
Thanks MS
If a pre-medicare retiree reemployed in a PERS covered position works additional hours to become eligible for the employer’s health care coverage, will that employee be eligible to receive the HRA allowance in 2022?
David,
A pre-Medicare retiree that is re-employed in an OPERS covered position in 2022 will have the option to opt into the HRA for 2022 during open enrollment this fall and the funds will be deposited into a re-employed accumulative HRA. Once the re-employment period ends the accumulated HRA will be deposited into the HRA with Via Benefits. Claims that happened during the re-employed period will not be eligible for reimbursement. Thanks MS
If I have already recently retired, or if I retire prior to 01/01/2022, am I still pushed into the HRA program? Or do I get grandfathered into the current Group Medical plan?
Marcus,
Effective Dec. 31, 2021, OPERS will no longer offer a pre-Medicare group plan. Instead, effective Jan. 1, 2022, eligible pre-Medicare retirees will begin receiving a monthly Health Reimbursement Arrangement (HRA) allowance.
Thanks MS
I will be 52 when I retire and covered under my spouse’s health care plan for many years. Will the monthly allowance deposited into my HRA expire at any point or will it just add up over the years until I am 65.
Laura,
Retirees can carry their HRA balance from year to year and continue using the funds to be reimbursed for qualified medical expenses. That includes HRA balances accumulated while retirees are Pre-Medicare after the retiree ages into Medicare.
I am planning to retire JAN. 1, 2022. Would there be an advantage to switch that to Dec. 1, 2021?
Rosemary,
We recommend that you make an appointment with one of our retirement counselors to discuss your options. Call us at 800-222-7377 to make an appointment with a counselor.
Can I use the HRA for my Dental and Vision coverage and out of pocket
Ray,
The HRA can be used to be reimbursed for post tax premiums, and out of pocket health care qualifying expenses. For more information on this transition, visit the Health Care 2022 page at opers.org.
Thanks MS
I’m now living in Florida and tried the WEBINAR and couldn’t get the audio to work. (Oct 14th,2021) I’ve tried to find someone to talk to that can clear this up for me. Will I be getting a hard copy of the WEBINAR demonstration?
Bonnie,
A hard copy of the webinar is not available to mail out to members. If you have additional questions please contact us at 800-222-7377.
Thanks MS
Employer contributions have stayed at 14% x 8 years? why isn’t a law passed to increase that? our HRA contribution will be decreased by $120 and, my yearly increase went from $40/month down to $6/ a month… what a sad joke! Get the employer contributions increased, NoW!
I am a spouse of an OPERS retiree. She has opted into the HRA. I remain on my employers healthcare plan which is an HSA. My employer now states that I am no longer able to contribute to my own HSA since my wife has a HRA. I do not understand how the one affects the other. Can someone please help?
Shawn,
You would need to contact the HSA plan administrator to find out why the HRA will impact you having an HSA.
Thanks, MS
I asked a similar question during enrollment with VIA. A little bit different circumstances as I have a private self HSA, not administrated by an employer. I was told I can continue to fund my account.
I’ve chosen a plan, paid the first month fee, now how/when will I receive information to seek reimbursement from my HSA?
Jim,
That information is contained within Via Benefits’ “Getting Reimbursed Guide.”