Under-65 health care plan approved for 2016
Participants in the Ohio Public Employees Retirement System’s health care plan for retirees under 65 will face some increased costs in 2016 as the system adjusts to pending federal rule changes.
Medical-plan deductibles, out-of-pocket costs and copays will rise, as will deductibles for and the cost of many pharmaceutical products, although the out-of-pocket maximum for drugs will decline for the nearly 50,000 OPERS retirees in the plan.
To reduce the impact of the increases, OPERS is providing a partial premium reduction over the next three years to help retirees enrolled in our Medical Mutual plan adjust to higher costs. This reduction does not apply to spouses, surviving spouses, dependents or re-employed retirees.
Your individual 2016 premium costs will be included in your open enrollment materials, which we will distribute in September.
OPERS is beginning to shift some costs to participants because of the proposed Cadillac tax provision of the Affordable Care Act. This rule caps the aggregate value of a self-insured health care plan and assesses a 40 percent excise tax to those entities that offer plans beyond that amount. Without plan changes over the next three years, OPERS could face millions of dollars in fines because of the tax.
OPERS plans to make gradual changes to its self-funded plan for retirees under 65, rather than impose large changes in 2018.
For instance, in-network deductibles will increase next year to $1,000, and total in-network out-of-pocket maximums will rise to $4,900. Office visit copays for primary care physicians will be $25 instead of $20, and there will be a $100 annual deductible for generic drugs. For a list of medical and prescription drug costs for 2016, click here.
Coverage for those under 65 and not eligible for Medicare will encourage the use of high-value-services such as full coverage of preventive services, lower office visit copays for medical home providers and free generic medications for those with certain chronic conditions.
The plan will encourage participants to seek out providers whose charges are at or below established maximum coverage levels for certain services, such as lab tests. Participants can expect communications from OPERS and Medical Mutual later this year about which labs are charging at or below the coverage maximum.
Other news for the under-65 plan in 2016:
- Retirees participating in a diabetes disease management program will no longer receive medications and testing supplies at no cost. The results of an independent study show that this coverage is no longer cost-effective or having the desired outcome in terms of health care utilization and clinical measures.
- OPERS will provide a $50 incentive for eligible retirees participating in Healthy U, a community-based chronic disease self-management program administered by the Ohio Department of Aging’s Area Agencies on Aging.
- There will be no coverage for over-the-counter heartburn medication.
- The voluntary dental plan will have some slight price increases. The voluntary vision plan will be unchanged.
More details will be provided to participants in August within the Health Care Open Enrollment Bulletin and with the 2016 open enrollment packet. More information on the plans for re-employed retirees will be made available later this summer.
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.
So, my costs will go up by at least $1650, plus whatever extra you’ll charge for the policy itself. How is this fair to those of us who are retired and can’t just find a job to cover these extra costs?
I understand you have to follow the federal law but I hate that my out of pocket expenses are going up and I will no longer receive my diabetes medications at no charge. I have faithfully followed your program and it has helped a lot not having to pay for all the medication. I really feel it helps keep you on track by talking with the nurse periodically. A person just can’t come out ahead in this game at all. I would really like you to seriously reconsider the diabetes medication issue. I also have asthma and issues with that due to fumes inhaled in the workplace 8 years ago – I may have to take out a loan to pay for all my meds.
you raise the cost of insurance for those under 65. So to help with the costs some people retire then rehire…but can’t get enough hours for benefits….then you penalize the retire/rehire people also…this is a no win situation.
I agree with you. The jobs you speak of don’t offer benefits, nor could anyone live on the true part time income, but it seems our government wants more people to stay home and not work. Sounding a little more socialistic to me. This will impact several County Boards such as your Board of Elections, Transit Systems, School Bus Drivers, Veteran Service Commissions, etc.etc.. Low paying part time jobs with no health benefits attached. So decisions will have to be made this fall to quit them by 31 December or pay for your already earned OPERS Retiree benefit again.
Unfortunately many of us will not be able to afford to continue with the level of care we need. If it was not for the free diabetic coverage on my prescriptions, I would not be able to afford them at $187 per month. I’m already being hit hard with medical expenses. The future will probably find a lot of people not getting the preventative care they need and not seeking help until it is critical. Once those critical bills pile up, everyone will be filing bankruptcy. I for one am feeling anxious and depressed about what my future holds with the increase in health insurance and decrease in health benefits.
Can you give us a percentage or idea of what OPERS is offering retirees on premium reductions and will it help us with the increased cost of spousal insurance?
Steve,
The net difference from 2015 to 2016 will be lower, although it might not look like a large reduction. However, you have to remember that your allowance is scheduled to be reduced next year for the first time since we made changes to the health care plan in 2012. Why? Because from now on the health care allowance is going to be based on your service time and the age at which you first chose OPERS health care coverage. We are transitioning to this new (lower) allowance figure over three years — a third reduction next year, another third in 2017 and another third in 2018 when the new allowance will be fully realized.
Without the three-year reduction in this premium amount it would have looked as if your premium went up at the same time that your out-of-pocket costs increased.
–Ohio PERS
That Diabetes program WAS a real help for me, both me and the wife are diabetic, needles, testing strips three or four times a day wont be possible at the costs they want. Those supplies should be free.
I’m all for saving money, but at what cost? I injured my back in March and went to my primary physician, who thought it was just a muscle strain, but ordered x-rays. I chose the least expensive place from Med Mutual website. The report said arthritis of the spine. After 3 weeks of constant pain, I brought my x-rays to an orthopedist. He took one look at them and said he could see a slipped disk and some odd calcification that warranted a further look. I had an MRI that showed a ruptured disk as well as the slipped disk. I’m a little scared to go with the least expensive again.
healthcare costs will kill you before disease does. After years and years of hard work and paying into a system there are attorneys , administrators ,drug companies and middle men making tons of money on the back of workers who paid into retirement or pension plans all their lives. It is a Shameful system that some day will crumble under its own greed.
So you are shaving costs to avoid the excess benefits tax, and the money you won’t be spending is going where? Are the OPERS employers going to be charged less? Is it going to improve the trust fund? Or perhaps OPERS was going to have a shortfall anyway and Obamacare is just a scapegoat.
Your announced increases are step one, where do we end up?
As far as I know, the IRS still hasn’t released the final regulations. They still leave open the possibility of adjusting thresholds based on demographics, and it seems to me plans nearly all their participants in their 50s and 60s would justify such an adjustment.
David,
The money we “won’t be spending” will ensure that we don’t exceed the Cadillac tax threshold and subject our system to millions of dollars in taxes, which could put a severe crimp in your health care coverage.
–Ohio PERS
This is scary stuff considering this jump from the current $2500 out of pocket to $4900, almost double, is considered gradual. Where will it be in ’17 & ’18?
A friend only carries private catastrophic insurance with a max out of pocket of $10,000. This first gradual bump makes our plan almost one-half of a catastrophic plan’s max out of pocket. Will our plan turn into a catastrophic plan?
This is killer. Our 3% annual COL increase leaves us dragging way behind these increases. Something has got to change or retirees will all need to be re-employed just to cover the increased health care costs. Oh wait, then we have to take the new employers plan.
There is no winning here for retirees!
Free Tums for everyone!!!
Can you tell us at this time what the full premium is, not our individual portion, or do we have to wait until September?
Retiree,
The self-supporting rate for the non-Medicare health care plan in 2016 will be $968 per month.
–Ohio PERS
It’s discouraging to get conflicting information. I called OPERS 2 weeks ago and asked the same question. I was told the full premium for 2016 is $894 and that OPERS will cover $862. She told me my total insurance cost ( medical, dental and vision ) will actually go down for me by approx. $10 per month. I questioned it because I know my allowance is scheduled to decrease but she said she used the calculator and did it more than once. I am frustrated feeling that I can’t get accurate information from the call center.
What I don’t understand is that for 31yrs. OPERS took almost 5% of my employers contributions for healthcare, and now I will get the same healthcare as those who contributed nothing. How ‘better’ is our health plan than those on ACA.
Mike,
We’re not sure what you mean by getting the same coverage as those who did not contribute.
–Ohio PERS
When is this Federally required to start ? When will we see how much the rehired retirees will have to pay for their insurance ? What about the “high risk” retirees higher federal standard for the “Cadillac tax, has that even been addressed ?
Tom,
You’ll see the 2016 cost information in the open enrollment guide in early September. We addressed your question about high-risk retirees in another blog comment.
–Ohio PERS
My husband is the retiree and I am his wife under 65.
I ‘mostly’ under stand what the new changes are for the retiree and the way in which things are going to be implemented. My question is can you address how the retired spouses insurance is going to be handled, or will it just be more cost effective to call a local insurance agent and look for insurance close to home?
Marty,
Spousal insurance will be through OPERS for those under 65. You’ll have to make the decision yourself, after seeing the rates for spousal coverage, where you’d like to access that coverage.
–Ohio PERS
You mean decide after picking oneself up off the floor when receiving the increase information! As the spouse of a retiree my insurance will raise from $179 a month to $444 a month for a total of $5328 a year. Seriously?
I guess our elected officials should have been smart enough to read the ACA “before” passing it. Treating our plan as a Cadillac Plan is ludicrous.
You can thank the Dems and Obama for this ludicrous “Affordable Care” act. The Dems rammed this all down our throats in 2009 when Obama got elected. NO Republican input. The Dems wanted to cost shift from the “rich” to the “poor”. The cadillac tax was supposed to make sure people (other than members of Congress, whose members are exempt form the ACA) didn’t get “real good” coverage. If they did they were supposed to pay a 40% excise tax over a $850 monthly premium.
The only problem is that Obama and the Dems think we retirees are the rich people. They think we, who have worked all our lives and payed our taxes, don’t contribute enough for our health care, and that we need to subsidize everyone else, because we are “rich”. So all of you retirees who voted Democrat in 2008 and 2012 and for Obama, YOU are the ones who put us in this situation. You Dems who are retired only have yourselves to blame for this debacle.
I too have to use insulin and those EXPENSIVE test strips.
I never considered our existing health care plan to be a cadillac plan at all (too many deductibles and copays).
Now about insulin and such. Medicare pays for all that how come we have to now????
And having us pay for an Endo at rates nearly double that of a regular (unqualified) doctor??
Most PCP’s are not specialists in many fields and therefore cannot accommodate the needs of the patient.
Don’t people realize that taking care of a chronic illness (diabetes in this case) is cheaper than paying for complications later on?
And since I cannot view the 33 minute video, I must have a transcript. Any site must not use activeX or javascript for me to see it. Not be a Windows Only type site. Of course no 3rd party cookies, LSO cookies, etc. I have to use a computer with pretty high security and most things do not work.
Oh and then there is who is going to pay for me to use internet somewhere? Gas and vehicle use is costly. I have no cable, internet,phone, satellite, nor can I afford to keep driving 70 or so miles to use either.
What about spouses and dependent children? Will medical coverage be available for them or do we have to use an exchange?
And why can’t we use some sort of ‘gap’ insurance to help? New plan can be supplemented into a cadillac plan with gap insurance, right?
Maybe you can offer gap insurance?
Another problem is that the MANDATORY phone calls to get the needed insurance.
I haven’t had a phone in years and cannot afford one (and really do not want one).
I used to get SPAM calls and such from Humana. No more since I got rid of a phone.
Not mention all the other problems from having a phone.
Who is going to pay for that obligation?
I live 1,000 miles from Ohio. I cannot attend any seminars. Nor can I afford to drive anywhere to attend.
I am already living in poverty. How much lower will I be required to go? How about PERS giving us poor people a 25% raise in income to offset the high costs? Poor meaning those with families and getting less than $30K a year.
People, please contact your representatives and pester them incessantly into repealing Obamacare immediately. This will benefit us all.
And for those who cannot afford it, welfare used to give medical cards (except to us retirees). Nothing more affordable than that for those 30 million who couldn’t get it before.
I saw no mention of fee controls for hospitals and other medical personnel. Nor price controls for medications like insulin. Ever see the price for that stuff? It is outrageous.
Ever go to the ER? Shocked by the extreme greed they have in their fees? And the poor workers aren’t getting much of that at all nor the doctors. Most of it is hospital admins getting rich.
Just venting and trying to bring to light that people in my situation will be destroyed by the costs.
Anyone know of a Ghetto’s Gehtto? That will be where I have to live if my income does not drastically increase nor expenses decrease.
1st off, these tax provisions don’t take effect until 2018, and the tax penalties will only apply to the amount paid that EXCEEDS the annual limit of $10,200 for an individual and $27,500 for a family plan, so saying OPERS may face millions in potential fines is ludicrous. Providing a small partial premium reduction while substantially increasing out of pocket expenses for the health plan recipients only enriches medical mutual. The “Cadillac Plan” description under the ACA speaks to plans that provide low, if any deductibles and copayments, and little cost sharing from the employee/retiree. On top of all of this, the law may be amended by federal legislators in the next two years, and you will have punished non medicare retirees for two years unnecessarily. This just represents another step in the continual erosion of Health benefits to PERS retirees in Ohio…..
Thomas,
It’s not ludicrous to say that our system faces millions of dollars in fines through the Cadillac tax. We have more than 167,000 retirees and primary beneficiaries participating in our health care coverage. Like you say, the law might be amended, and we are actively trying to make that happen. On the other hand, it might not be amended so we’re making these changes in 2016.
–Ohio PERS
O.K. Michael, lets be completely transparent. How about if you lay out the numbers. Of those 167,000 health care recipients in OPERS, how many are actually on Medical Mutual for 2015? Less than 15,000? That population is quickly shrinking as OPERS has made it virtually impossible for current employees to retire prior to age 65 as you are in the process of destroying all medical coverage for retirants not on medicare, and of course, all of their spouses regardless of their age or medicare coverage. In 2018 you could obviously increase the premium cost to the handful of recipients that are left and keep the tax from being imposed at the $10,200 limit, assuming that it isn’t raised to reflect inflation occurring in medical insurance. Calling a plan that has a limited network, a thousand dollar deductible, and $4900 in copays ONLY IN NETWORK a Cadillac plan seems pretty silly. Saying that people with this coverage are over utilizing it is even more ridiculous. More like a catastrophic care plan. Many of the people like myself, and virtually all the people that retired around the same time I did, will qualify for medicare well before 2018, so you are penalizing them for a period of time for absolutely no legitimate reason. No argument that you have made “to prepare” people for something is an excuse to do this….
Thomas,
We do not publish that information about our member participation.
–Ohio PERS
Do you know what the small partial premium deduction will be? Will this be in the literature we receive in September?
Ms. Ingram,
Yes, that will be reflected in the cost statement in the open enrollment kit.
–Ohio PERS
Do we OPERS retirees have lobbyists representing us and encouraging a repeal of the “Cadillac Tax”?
Frank,
We are encouraging its repeal or at least an exemption for retiree-only health care plans.
–Ohio PERS
In 2018 I will be 65 (in May) and will be filing for Medicare. My understanding is that if I would not be required to file at that time I would be paying all premium without OPERS supplementing any of it. Is this correct. Since I will be off of OPERS my wife will no longer be entitled to any health insurance through the system and she will not be eligible for any health insurance or retirement of her own so we will have to find other insurance for her at whatever premium that is available. When I do apply for Medicare my understanding is that OPERS will pay some part of that premium. I am also thinking of applying for Medigold as a Medicare supplemental program. Is this going to be an approved plan under OPERS?
Bill,
In 2018, if you sign up for Medicare parts A and B, you would be eligible for a monthly allowance through the OPERS Medicare Connector. We would deposit an amount each month for you into an account that you could use to reimburse yourself for qualifying medical expenses such as coverage for you and your spouse. Most of our Connector participants will receive about $337 monthly in 2016. We can’t make predictions now about what plans will be available through the Connector or what that allowance will be in three years, although it’s our intention to adjust it for inflation.
–Ohio PERS
What is the purpose of charging rehires an additional charge for health care? I am not eligible for health care at my rehire job.
Kim,
The changes are in response to federal health care regulations, which limit plan benefit values. They also provide that a Health Reimbursement Arrangement is insufficient coverage for an individual defined as an employee. The HRA is a key component of our OPERS Medicare Connector. The new rules would penalize OPERS if we provided coverage to re-employed retirees through an HRA.
–Ohio PERS
Mike:
I think Kim is asking why the Under 65 Group is being asked to pay more, not the Medicare eligible group. There is no HRA for the younger group. Also why aren’t the under 65 retirees from Police/Fire, STRS, SERS being affected by this change?
Roy,
There is no HRA for the under-65 group, but they still have an allowance that covers much of the premium. As for the other systems, we would refer you to them for an explanation of their policies.
–Ohio PERS
I am rehire part time with no benies with a co. agency. I am under 65 until june of 2016. I know I will get punished for working this job. So if I fully retire then go to work for a temp service and they contract me out to a county agency, will I still get punished by paying more for my med Inc. and the conector when I turn 65. I would be getting paid by temp service and paying SS?
Steve,
If you retire and go back to work for a temporary agency and are assigned to an OPERS employer, you would be excluded from OPERS membership and thus would not be considered a re-employed retiree. This rule is contained within Ohio Revised Code Section 145.012.
–Ohio PERS
I would like the correct definition of ” Surviving Spouse” and that of ” Surviving Beneficiary” After 30yrs
in PERS my wife passed with out retiring, what are my health care benefits? And are they not different then the spouse of a retiree? I feel this new action to eliminate surviving spouse health care benefits should not impact me since my wife never retired. I now get 60% of her actual benefit rather than 50% of her 66% of her salary , which a “surviving spouse” receives. Please clarify before I talk to an attorney. Also, what is your appeal process in this matter?
August,
Health care allowances are transitioning to zero for all spouses (surviving spouses included) starting in 2016 until the allowance becomes zero in 2018. The plan of payment you refer to is for pensions only — health care has never been a guaranteed benefit. Please contact our Member Services Center at 800-222-7377 for detailed information regarding your account.
–Ohio PERS
I’ve noticed that premiums for spouses have increased dramatically for 2016. Is it still the plan to phase out spousal coverage, and if so, what is the current timetable? Can we expect a similar increase in 2017?
Also, is it still the case that, if a spouse leaves OPERS medical coverage, s/he can never come back on?
Elias,
We can’t speak to potential increases for 2017. But we can say that yes, there will be a similar reduction in the spousal allowance for 2017, and then it will go to zero in 2018. Spouses can come back onto coverage in the future, but keep in mind there will be no allowance as of 2018.
–Ohio PERS
I just turned 62. Do I need to do anything with my medical, like going thru the Connector to enroll in something? This is all very confusing.
Great question. Generally speaking, because you are under the Medicare age, you would remain on the OPERS Retiree Medical Plan. You should receive your OPERS Open Enrollment materials in early October which will include a personal statement with plan options. Please watch your mailbox for further instructions.
Thanks,
-Ohio PERS