Health care comes into focus
Board makes decisions on allowances, subsidies for ‘19
By Michael Pramik, Ohio Public Employees Retirement System
June 20, 2018 – The OPERS Board of Trustees took several actions at its June meeting regarding health care coverage for retirees.
The first action was to approve the continuation of Health Reimbursement Arrangement allowances in 2019 at their current levels for participants in the OPERS Medicare Connector. This allowance is the monthly deposit OPERS makes into participants’ HRAs, which are used for medical cost reimbursement.
Other actions involved subsidies provided to participants in the OPERS health care plans, as well as premium rates for pre-Medicare retirees.
Action on subsidies
When OPERS implemented changes to the health care plan in 2015, we announced an extra $300 annual deposit for three years (2016-2018) for Medicare Connector participants.
This subsidy was designed to help pay for out-of-pocket prescription drug expenses in Medicare’s donut hole, a coverage gap that about 25 percent of OPERS health care participants experience after they’ve reached a defined, out-of-pocket cost threshold.
A similar amount was provided to pre-Medicare participants in the form of a $25 monthly premium subsidy.
The Connector payment was subject to a one-year extension, depending on the timing of Medicare’s “closure” of the donut hole, originally set for 2020. Closing the donut hole still will require participants to pay for 25 percent of drug costs while in the coverage gap (down from 45 percent).
Because Medicare this year announced that the coverage gap for brand-name drugs would close a year early, the OPERS Board voted to not extend the $300 payment for Connector participants, and the $25 additional subsidy for pre-Medicare plan participants, beyond this year.
The donut hole for generic drugs is scheduled to close in 2020. Connector participants will continue to receive the regular, monthly contributions into their HRA accounts, and pre-Medicare participants will continue to receive their health care allowances as outlined below.
2019 allowances and additional subsidy
While the Board discontinued the donut hole-related subsidy for pre-Medicare retirees, it did vote to continue a $49-per-month premium reduction for this group of retirees.
This reduction’s purpose is to counter cost-shifting to retirees that occurred in recent years to avoid the Cadillac Tax threshold provisions of the Affordable Care Act. The Cadillac Tax would be assessed to health care plan providers when the value of their coverage exceeds certain thresholds.
Meanwhile, the Board set 2019 premium rates for pre-Medicare retirees. The rates affect the allowances OPERS provides to pre-Medicare retirees, which are based on age and years of service at the commencement of health care coverage.
Here’s a representative summary of the 2019 pre-Medicare premiums:
| Total monthly premium | $1,306 |
| OPERS-paid allowance (75%) | $979 |
| OPERS-paid subsidy | $49 |
| Member premium | $278 |
Health care coverage for pre-Medicare spouses and children will be available to those enrolled in the OPERS health care plan. The estimated cost will be the full monthly premium of $1,306 for spouses and $451 for children.
Look for details of your individual 2019 health care costs in our open enrollment materials later this year.
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.
In January 2019 I will have 30 years and 6 months with Wright State University. What will my insurance premiums be for me and my wife(age 54)
Open Enrollment for all health care participants will begin on Oct. 15 and end Dec. 7. Look for details of your individual 2019 health care costs in the Open Enrollment mailing that will arrive in homes in early October.https://perspective.opers.org/wordpress/wp-admin/edit-comments.php?comment_status=moderated#comments-form
Does this have any effect on the $74/month more I pay each month that I am “re-employed”?
Yesterday’s Board decision does not have any impact on participants in the re-employed health care plan.
What will the premium be for the spouse of a retiree who is not yet medicare eligible?
Open Enrollment materials will arrive in early October — look for details of your individual 2019 health care costs in this mailing.
Are you going to help us out for spouse pre medicare health insurance or are we going to have to pay the whole $1306.00 for them again.
You can find more information about health care for eligible dependents on the OPERS website at https://www.opers.org/healthcare/enrollment/eligibledependents.shtml
Julie, OPERS
Thank you for the continuance for the HRA premium reimbursement,it will help my wife and I a great deal.
Thank you for the premiums for 2019. What about pre medicare rates for spouses and dependent children? Are you still covering in 2019 and, if so, what would the approved rate be for them? Any more news on not covering spouses since the Affordable Care Act is being dismantled and may not be around much longer?
Mr. Harris,
More information about health care for eligible dependents is on the OPERS website at https://www.opers.org/healthcare/enrollment/eligibledependents.shtml
Julie, OPERS
PLease explain what is happening to us rehired retirees who choose to work at a PERS facility after retirement. I’m not sure what will happen if I continue to work past Medicare age. Will I have to pay for my entire Medicare premium myself? Or what else will happen?
Yesterday’s Board decision does not have any impact on participants in the re-employed health care plan.
No mention of whether spouses of retirees will be able to purchase health care through OPERS. Even though paying full price.
More information about health care for eligible dependents is on the OPERS website at https://www.opers.org/healthcare/enrollment/eligibledependents.shtml
Julie, OPERS
Thanks for all the hard work all of you do on the Board. We appreciate on being keep in the loop as changes, etc. come to Medicare.
Does this say spouse that is on Medicare will pay $1300+ per month for coverage in 2019?? Not sure what I am reading. Please clarify!!
Ms. Anderson,
Those on Medicare and their spouses who are Medicare-eligible will pay the premiums for the insurance plan they choose through the Connector.
Julie, OPERS
Thank you for keeping the HRA for Medicare retirees at the same rate.
S.L. Bowers
Thank you for keeping the current HRA rate. It is a great help in paying our medical expenses and premiums. The rate is not high considering I had only 11 years service.
I just want to confirm and clarify that offering coverage to spouses will continue through at least 2020 — I think that was the official decision? And, if a spouse chooses coverage other than OPERS and that coverage / plan is eliminated, the spouse would not be able to get back on coverage through OPERS?
Both pre-Medicare and Medicare-eligible spouses have access to health care coverage through OPERS. Pre-Medicare spouses can enroll in OPERS health plan coverage, however they are responsible for the full cost as OPERS no longer pays a portion of a spouse’s premium. The full monthly premium cost in 2018 is $1,159.61. Medicare spouses are able to use the OPERS Medicare Connector (administered by Via Benefits) to enroll in a medical/pharmacy plan and continue to use their services. Spouses do not receive a monthly HRA deposit.
What advantage is there for keeping spouses using Via (One Exchange)?
Many find the assistance provided by Via Benefits to be very helpful when shopping for health insurance. If your spouse leaves the Connector, they can come back later without penalty – BUT – depending on the type of plan chosen, they will have to go through medical underwriting and will be limited when they can choose a plan. Medical underwriting means health questions will be asked during the initial enrollment period.
Looks like a monthly payment increase of $62.10 for pre-Medicare retirees. Has the cost for dental and vision been determined yet?
Open Enrollment materials will arrive in early October — look for details of your individual 2019 health care costs in this mailing.
I retired at age 54 with 30.475 years of service. Any idea what I will receive as healthcare subsidy when I turn 65 in March of 2019?
A health care estimate tool is available through your online account, located in the “Tools and Resources” tab, that may help you find this information. Another option is to call us at 1-800-222-7377 for assistance.
Several years ago, OPERS announced the phase out of the subsidy for health insurance for pre-Medicare spouses. That announcement stated that OPERS would continue to allow spouses to purchase OPERS health insurance (at full price) through 2020 at which point an assessment would be made as to whether to continue to allow spouses access to the plan. Has this assessment been made? Will spouses be able to remain in the plan (at full price) beyond 2020?
Spouses will continue to have access to health care coverage in 2019. The Board has not addressed 2020 coverage yet. The 2020 health care plan design will be addressed by the Board in 2019.
Thank you for responding. I’m a little confused. My understanding was that spouses would have access through 2020 (not 2019) and the board would revisit for 2021 and beyond. My understanding came from the 2013 Health Care Changes overview document published by OPERS (revised December 2013), in which the following statement was listed under the Spouse coverage heading: “Spouses under age 65 will have access to OPERS coverage at full cost through at least 2020”. But your response indicates that 2020 is in question. Has the date changed or was the publication incorrect? (I have a copy of the publication if that helps)
Thank you again for helping to clear this up.
You are correct. OPERS will continue to provide health care access for spouses in 2020. Sorry for the confusion.
Julie, OPERS
My HRA account income gets eaten up as soon as it is accredited to my account ($335). Each year my insurance premiums are increased and my retirement savings gets lower every month because I must make up the difference. It would be such a relief if the HRA would adjust to help cover these premium increases instead of just staying the same. I’m not asking for a lot just enough so that I don’t have to give up my home at the age of 70.
I’m 51 and am not eligible for Medicare. What will my 2019 premium be?
All retirees will receive a 3% COLA in 2019.
Not getting the additional $300 in January of 2019 made a mess of my HRA account and I will be having to change to a lower quality health insurance because of it. I used it mostly for premiums and Part B and a FEW prescriptions……and just not enough….
Please compare the amounts that will be deducted from our retirement disbursements 2018/2019. The amount taken out of my retirement check was almost tripled from 2018 to 2019.
You will receive a benefit change notice in a few weeks with the exact amount of your 2019 benefit.
Julie, OPERS
I posted the below question in July, 2018 regarding the continuing availability of pre-medicare spousal health insurance beyond 2020. While I understand that spouses will be allowed to enroll in 2020, I’d like to know if benefits will remain available to spouses in 2021 and beyond? The answer is important for our retirement planning.
from July 14, 2018 at 11:52 am
Several years ago, OPERS announced the phase out of the subsidy for health insurance for pre-Medicare spouses. That announcement stated that OPERS would continue to allow spouses to purchase OPERS health insurance (at full price) through 2020 at which point an assessment would be made as to whether to continue to allow spouses access to the plan. Has this assessment been made? Will spouses be able to remain in the plan (at full price) beyond 2020?
Mark,
Pre-Medicare health care is being debated at the board level. Keep up with OPERS news via PERSpective and other outlets, and there should be more information available in the coming months.
–Ohio PERS
Also what about retirees that pay for Medicare A/get reimbursed by OPERS for their Medicare A, and have spouses that will also have to pay for Medicare A? At my retirement I understood that retirees would be reimbursed by OPERS at 50 percent for their spouses that have to buy Part A, and the spouse could use the Connector to by plans. Is this still right?
The Medicare A reimbursement process has not changed.
Julie, OPERS