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Retiree Medical Study

Leadership UpdateOctober 2015

Ensure retirees and university are getting the most for their dollar Affordable, accessible retiree medical plans are now available in the market Taking advantage of options such as Medicare subsidies could lower costs

Ensure university can continue insurance benefits (medical, dental, life) for current retirees By 2019 the liability for current and future retiree medical benefits will be over

$1 billion, increasing to $4.5 billion in 30 years Recent finalized Governmental Accounting Standards Board (GASB) ruling

means the university will need to begin to fund the liability This is additional money that will increase the benefit rate

Retiree Medical Study Objectives

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-

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

4,500.0

5,000.0

2015 2020 2025 2030 2035 2040 2045

Our challenge: Current liability projection

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$4.5B in 2045

$808M

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Jan 2015 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 2017

Project timeline

Progress to DateAnnounce Study

Launch Dedicated Website

Review Current Plan

Conduct Benchmarking and Marketplace Review

Conduct Listening Tour

Develop Potential Designs

Conduct Focus Group Testing

Develop Implementation/ Communication Strategy

Finalize Plan Analysis

Announce

Direction

Guiding Coalition Meetings Website Updates Educational Resources

Retiree plan implemented

@

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TRAC Review

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Current Retiree Insurance Program

Eligibility for insurance benefitsAge 55 and at least 10 years of service, or age 60 with at least 5 years of serviceGenerally, spouses are eligible for lifetime coverageSame eligibility applies

to retiree dental and lifeMust have UM benefits

prior to retirement5

Current retiree medical plans

Pre Medicare retireesPPO PlanHealthy Savings Plan

Post-Medicare retireesmyRetiree Health Plan Healthy Savings Plan

Subsidy – UM subsidy varies based on age and years of service at retirement but averages 50%

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Only 6 million of 45 million Medicare retirees have coverage through an employer plan

Market plans for Medicare-eligible are robust and offer universal access

Significant federal subsidies are available to complement or replace Medicare

Enhanced Medicare pharmacy benefit by 2020 (provided through Affordable Care Act)

Pre-65 options are developing

Changes outside the university

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Eligibility and/or vesting (who gets benefits?)Who receives the benefit (and for how long)?How much of a benefit do they receive?Are spouses covered; what about widow(er)s?

Plan design (what do they get?)Cost sharing for medical expenses

Coinsurance, copays, deductibleEmployer funding (how much does UM pay?)

The “levers” for Retiree Medical Program

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Preserve plans (medical, dental, life)Continue current UM subsidy of premiumsTake advantage of market options to increase

value / lower cost

Current retiree recommendations

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Status of future retiree medical benefitsfor active employees

Plan will likely close to new hiresMultiple options developed

Being reviewed by the Total Rewards Advisory Committee (TRAC), who will make recommendation(s) to VP of HR

Targeting December 2015 or February 2016 recommendations to Board of Curators

Ample time and support resources will be provided to faculty and staff to consider any changes

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Subhead goes here

2016 Annual Enrollment

HRC August 2015

Your role as a leader Make sure you’re informed

— Understand generally the when and what of Annual Enrollment so you can help inform your faculty and staff

— Know that active enrollment could result in defaults if your employees do not take action

We need your buy-in and support for your employees during the process

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Important dates to take action

Before enrollment: Choose insurance that is right for you

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Benefits guide

Meetings & one-on-ones

Plan comparator

Campus Benefits Reps. / HR Service Center

Be tobacco free

http://umurl.us/enrollment

Important dates to take action

During enrollment: Select your plans

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https://myhr.umsystem.edu

Log into myHR

Make your selections

You’re not done until you click “Submit”

Don’t default!

Important dates to take action

After enrollment: Make the most of your benefits

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Review your confirmation

Complete your HSA paperwork

Keep an eye out for new cards

Consider investing your premium savings

http://umurl.us/enrollment

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SECTION TWO:

Insurance options

Medical options

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Plan Employee monthly premium UM monthly premium

Healthy SavingsLowest premiumHSA w/ university contributionsCombined medical and deductible℞Broad network

Custom Network PlanMid-level premium$0 medical deductible; separate $50 retail ℞ deductibleIn-network providers from MUHC + a few others

PPO Highest premium$350 medical deductible; separate $75 ℞ deductibleBroad network

Tobacco-free discount

No discount

Self $35 $85

& spouse $120 $170

& child(ren) $95 $145

& family $188 $238

Tobacco-free discount

No discount

Self $65 $115

& spouse $179 $229

& child(ren) $146 $196

& family $272 $322

Tobacco-free discount

No discount

Self $123 $173

& spouse $296 $346

& child(ren) $244 $294

& family $434 $484

Tobacco-free discount

No discount

$390 $340

$730 $680

$628 $578

$1002 $952

Tobacco-free discount

No discount

$413 $363

$777 $727

$668 $618

$1068 $1018

Tobacco-free discount

No discount

$517 $467

$984 $934

$844 $794

$1358 $1308

Medical options, cont’d.

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What’s differentPremiums

Tobacco discount & attestation

New medical plan administrator:United Healthcare

New HSA administrator: Optum Bank

Same prescription administrator, ExpressScripts, for all plans

RX Deductible on the custom network plan

Out of pocket maximum changes

Check provider lists – may have changed.

What’s the sameHSA contributions

Amounts prorated after 1st quarter

Custom Network remains in Columbia only

Active enrollment

Self $400

& spouse $800

& child(ren) $800

& family $1,200

Other insurance plans

Dental, vision, life, and accidental death & dismemberment— No change in plan structure— Premiums – no change

Long Term Disability (LTD)— During the two-week period of Annual Enrollment only, faculty and staff have a unique

opportunity to enroll in Option A or Option B Long Term Disability (LTD) without providing evidence of insurability or otherwise going through underwriting

— Those who currently have LTD coverage, will default to the same coverage but can make changes

— Those who waived in previous years, will automatically be enrolled in university paid Option A

Privacy notices— We will be ensuring that all employees are alerted to our privacy notices— Always available at http://umurl.us/notices

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SECTION THREE:

Wellness Incentive

$450 incentive program

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50 pointsTake the Wellness Pledge in myHR with Annual Enrollment

50 pointsTake an online Personal Health Assessment

* Taxable income. Voluntary retirement plan savings are also deducted. Must pay premiums for medical insurance to be eligible. Must be actively employed at time of payout to earn the incentive.

$450 incentive program, cont’d.

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What’s different

Rest of incentive program begins November 1, after taking the pledge during Annual Enrollment

No biometric health screening

Expanded activities

Either incentive points or prizes under the Million Step Pedometer Program; not both

Tobacco-free / tobacco cessation program no longer earn incentive points—replaced by premium discount

What’s the same

Must be a primary subscriber to university medical insurance to be eligible

Must be an active employee at the time of payouts

Must earn the initial 100 points by April 30 to receive $100 in your May paycheck; and the remaining 350 points by September 30 to receive $350 in your October paycheck

* Taxable income. Voluntary retirement plan savings are also deducted.