Answers to 2022 health care questions

This month: Learn what you can do now to prepare for next year

By Michael Pramik, Ohio Public Employees Retirement System

May 25, 2021 – As we draw nearer to 2022, and the changes that will affect OPERS Pre-Medicare retirees next year, we will periodically post questions and answers to key topics we believe will benefit our members.

This month we’re answering several questions regarding the Premium Tax Credit and the Health Reimbursement Arrangement (HRA), the difference between health maintenance organizations and preferred provider organizations, and some things you can do now to prepare for 2022.

Q: Could you please explain where the IRS states you cannot have an HRA and receive a premium tax credit if you purchase insurance through Healthcare.gov?

A: The IRS addresses this issue in a Q&A about the Premium Tax Credit (Question No. 18): “If you are provided a retiree-only HRA, you cannot claim a premium tax credit for the months you are provided the HRA.”

When the OPERS Board of Trustees deliberated and approved the Pre-Medicare HRA, it determined that an eligible retiree must opt-in to the HRA in order to receive an HRA allowance. 

Q: I understand I’ll be signing up for Pre-Medicare health care coverage during open enrollment. But is there anything I can do in the meantime to plan?

A: Yes. We recommend that you take some time now to consider your medical needs, your doctors and your annual income for 2022.

Do you or does someone in your family have a chronic condition, such as asthma, diabetes or heart disease? Or take maintenance medications or use specialty drugs? Knowing your needs for next year will be very helpful when it comes time to choose a plan.

Also, consider whether you or your family members see specialists regularly. Do you have upcoming treatments or surgeries planned? If you’d like specific doctors to treat you, you’ll need to seek coverage that includes them.

Regarding your annual income, that’s important to determine if you’ll be eligible for a federal subsidy in the form of a Premium Tax Credit. If so, you’ll need to weigh your funding options, and determine whether you’ll take the Premium Tax Credit or opt in to receiving an HRA deposit.

Q: I understand that the new plans for Pre-Medicare coverage are typically health maintenance organizations (HMOs), not preferred provider organizations (PPOs). What’s the difference?

A: That is true. HMOs provide coverage only within a defined network, except in the case of an emergency. A primary care physician may be required, and premiums may be lower in exchange for certain network restrictions. Deductibles also may be either low or not required for in-network care.

Meanwhile, a PPO provides full coverage in-network and some out-of-network coverage. A primary care physician is rarely required, and premiums often are higher for this network flexibility. Deductibles typically apply for in-network treatment, and they’re often higher for out-of-network care.

These types of plans also differ on how referrals are executed. In an HMO, referrals may be required before seeing a specialist, while that’s rarely the case in a PPO.

Finally, in both types of plans, out-of-pocket maximums are required to control excessive costs.

Q: I’m in the OPERS group plan. What type of plan do I have now?

A: Medical Mutual is a PPO. The majority of individual and family medical plans offered throughout Ohio are HMOs.

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.

Michael Pramik

Communication Strategist

  • If my spouse is otherwise not eligible for health insurance and I take the HRA, is my spouse eligible for the premium tax credit (with the understanding that the health insurance offered to spouses by OPERS is not considered affordable based on income)?

    • Dwight,
      If a benefit recipient of OPERS is receiving a contribution to the OPERS HRA the spouse would not be eligible for the premium tax credit, the household cannot receive both benefits. If you have questions about the option that would be best for you, please contact Via Benefits during the open enrollment period to get additional information. If you have questions regarding the tax implications of the HRA and/or Premium Tax Credit, please consult a tax advisor. Thanks MS

    • Maxine,
      There are changes in 2022 for all retirees both pre-Medicare and Medicare for more information about the health care in 2022 please visit our Health Care 2022 page at opers.org. If you have account specific questions you can send the questions through the online account message center or please contact our Member Services Center at 1-800-222-7377. Thanks MS

  • do not take our 3% cola away. if you do you will set us back years. no way we will ever get it back. we worked years for it, leave it alone.

  • This is hard to understand for some people, are there going to be people who will help the elderly OPERS retirees so they won’t get robbed of their income?

  • I’m retiring 7/30/2021 and am 64. As I understand I will have Medical Mutual PPO until 12/31/2021. How does this work for someone who will be moving out of state or will be living 6 months in Florida and 6 months in Ohio?

  • Why did OPERS decide to continue to reimburse retirees who do not qualify for premium-free Medicare Part A for their premium and any penalty at 100 percent. Eligible spouses will also continue to receive a 50 percent reimbursement. According to Medicare’s website, a person has to have “paid into Medicare for 40 quarters (equal to 10 years) to receive premium-free Part A. If a person paid Medicare taxes for less than 30 quarters, the standard Part A premium is $471. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $259.” If you do the math, OPERS could reimburse a retiree with a qualified spouse up to $706.50 per month for Medicare Part A, plus any penalty at 100%.

    An OPERS retiree now has to have 20 years of service to qualify for OPERS health care/HRA benefits. This is twice the amount of time required for premium-free Medicare Part A. I have 32 years of service during which time I paid into Medicare as required of all OPERS members. In 2022, my HRA is being reduced to $315 minus $2.60 HRA administration fee, which equals $312.40 per month (the maximum HRA benefit for OPERS retirees). My spouse receives no OPERS health care benefit based on my OPERS service.

    Why would someone with less than 10 years of service receive such a significant benefit for himself/herself and spouse?

    • Jennifer,

      OPERS is mandated by state law to offer coverage to a group of members who were not permitted to pay into Medicare Part A after Medicare rules changed in 1986.

      • Change the State law! OPERS has changed State laws before. I am in agreement about why pay for Medicare A.

  • Dan.C

    So if you use the Premium Tax Credit do you still receive the HRA allowance? Will it continue to be put into your HRA account until you are 65 and then be able to use it at that time for supplement insurance.

    • Dan,

      It’s one or the other: premium tax credit or HRA allowance. IRS rules specify it can’t be both.

      • I understand that you can only use one or the other. My question is if you don’t use the HRA allowance will it still be put into your HRA account until your 65 then you can use it?

        • Dan,

          If you opt into the HRA, the funds roll over each month until you ask for reimbursement.

  • I understand that changes are sometimes needed but everything with OPERS as of late seems to be taking back. It is not fair to make changes that affect Members closer to retirement or already retired. I based my decisions and made my adjustments based on the rules OPERS made 10, 15, 25 years ago or longer. The changes you make now will affect the newer employees and they will have years to adjust to them, but we do not.

    I would like to retire in 2-3 years from now after over 30 years as a Member and being well into my 60’s. If I was still early in my career I could adjust to these newer rules, but to change the rules at the end of the race is unfair.

    I would kindly ask OPERS to consider Grandfathering their older Members from the new rules as we can no longer adjust to them.

    • Alan:

      You are right on the money…so to speak.

      However, the blog discussions that I have had with OPERS over numerous previous years has little impact, if any. For almost the past 15 years there has been only “taking back” as you note.

      When I was younger and working, they increased the % that employees sent to OPERS from 8% to 10% over a two-year period. However, that is never considered now and I don’t even know if Board members are even discussing it.

  • If I retire on Dec 1, 2021 can I still get the one time $1200 HRA offered if I opt out of the HRA in January 2022? This would be due to my qualifying for a premium tax credit. Also, if I opt out of the HRA can I opt back in if I change my mind or my circumstance changes?

    • TB,
      A pre-Medicare benefit recipient would be required to be enrolled in OPERS pre-Medicare group plan with Medical Mutual as of 12/1/2021 and opt into the pre-Medicare HRA to be eligible to receive the $1200 transition deposit. You must opt into the HRA during the open enrollment period if not opted in during the open enrollment period the member would not be eligible to opt in until the next open enrollment unless there are mid-year changes to the eligibility criteria that would put the member in a special enrollment period. If you have additional questions please forward them through the online message center or contact OPERS at 1-800-222-7377.
      Thanks
      MS

  • I am on OPERS disability and turn 63 in December. Will I have to choose a new health insurance provider (currently Medical Mutual).

    • Karen,
      The Medical Mutual plan through OPERS will be ending 12/31/2021 and our pre-Medicare benefit recipients that are eligible for the health care program will have the option to opt into a health reimbursement arrangement effective 1/1/2022 and can choose a medical plan through OPERS pre-Medicare Connector with Via Benefits, through HC.gov, or through an outside plan. We recommend contacting Via Benefits during the open enrollment period to get details about your options.
      Thanks MS

  • I’m sure this has been asked and answered, but how will my years of service be calculated for my “Health Care Allowance Percentage”? I retired with 33.667 years of service under age 60. On the allowance table, would I receive the 76% or the 77% allowance?

    • David,
      If you retired with 33 years of health care qualifying service credit at or under age 60 the allowance percentage would be 76%.
      Thanks MS

  • My wife, who has to seek health insurance because OPERS does not provide it for her, was told by her health insurance agent that if you use a Health Reimbursement Account in order to get reimbursed you have to get get your insurance from the Affordable Health Care Act’s Marketplace as opposed to the open market where she gets short term insurance with high deductibles. Is that true? Am I able to get SHORT TERM health insurance through OPERS pre-Medicare Connector with Via Benefits, through HC.gov. If not and I get it though an outside plan will that be fully reimbursable for my HRA?

    • Phil,
      The pre-Medicare HRA does not require our members to enroll into a plan through the pre-Medicare connector or healthcare.gov to be eligible for the HRA. The pre-Medicare HRA requires the member to opt into the HRA during open enrollment to receive the deposits in 2022.
      Thanks MS

  • I am considered reemployed, but I don’t qualify for health insurance there. I understand I can opt in, during open enrollment for the HRA, and it will be placed into a reemployed HRA that can’t be used until the employment ends. I am eligible for the premium tax credit and plan on using it to get health care. Will my “reemployed” HRA continue to build until the time I am eligible to use it?

    • Pamela,

      If you accept a Premium Tax Credit, you are not eligible for the OPERS HRA for 2022. Please discuss this with Via Benefits during open enrollment.

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