Legality of OneExchange Insisting Retirees Buy Through Them ...

Oct 13, 2015

  1. Medigap
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    Medigap Expert

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    This has been a headache for many of us over the past several years. As many of you know, OneExchange (formerly known as ExtendHealth) works with large organizations to replace the promised retiree health plans with stipends to have the company retirees buy their own Medicare coverage.

    My concern has been that these retirees are being told that they must go through OneExchange to buy their coverage (usually at higher premiums for Medigap) or they will not get reimbursed.

    I have found nothing that indicates that they are obligated to go through OneExchange and, on the contrary, have found much evidence (including on their own website) that seems to indicate that the retiree can go outside of the exchange for coverage but would just have to file manually for reimbursement (as opposed to automatically being reimbursed if they buy through the exchange). Inevitably, the "advisors" at OneExchange essentially force them (via threats of not being reimbursed) to buy through the exchange.

    Anybody have any experience with the legality of this and whether the retiree does have to go through the exchange or can buy outside the exchange and be manually reimbursed?

    I had one of the Q&A documents for one of the companies working with OneExchange that indicated as long as the client bought one product (ie Part D) through the exchange they would be entitled to reimbursement for other plans (ie Medigap) bought outside the Exchange. I'm just not sure if this would be true of every client.

    Also, most curious if it is legal to force the retirees to go through OneExchange.
     
    Medigap, Oct 13, 2015
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  2. finalexpenseguru
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    finalexpenseguru Super Genius

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    Aon Hewitt also does this. I wish there was something printed somewhere where we could refer to it when this comes up. Seems they sell only the expensice carriers that pay full comp on GI. Wonder why?

     
  3. WCMason
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    WCMason Guru

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    They are not forced to use the exchange. They are coerced to use the exchange because they will not get the HRA funding from the company they retired from if they don't. The company does have the right to determine what they will and will not pay for.

    If the FAQ documents allow them to go outside the exchange and get reimbursed so long as they get one medical insurance product through the exchange then you're good. Many of us have ATT clients who did exactly that. They got their drug plan for the exchange, their supplements through independent agents like us, and got their entire HRA funding.

    For those companies that do not let their retirees go outside the exchange, while I don't like it I don't have a problem with it. Before the company went to the exchange model, they were offering a retiree plan that we couldn't participate in anyway.
     
    WCMason, Oct 13, 2015
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  4. somarco
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    somarco GA Medicare Expert

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    The plans are tied to a retiree only HRA. Employer deposits are made annually subject to purchasing coverage through Aon, Towers Watson, etc.

    As you indicated, some of the HRA documents indicate as long as they purchase at least one product (such as a PDP) from the exchange they can still get the HRA monies. Others lack that qualifier and simply say you must purchase coverage through the private exchange.

    Yes, the agreement is illegal. You can't have a tie-in arrangement with ERISA plans.

    If enough people complained to the DOL and the DOL decided to audit they would probably rule in favor of the pensioner and against the consultant.

    Chances of that happening are about as good as capturing Big Foot.

    I have some AT&T clients. Still get a lot of hits on my site from AT&T retirees but I don't really pursue it. There is low hanging fruit that is much easier to pursue.
     
    somarco, Oct 13, 2015
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  5. kgmom219
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    kgmom219 What's Next?

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    I just met with a Texas Instruments retiree today. They got kicked over to Towers Watson for 2016.

    Hold time is 2+ hours

    Reimbursement is at $2700, but its grey on PDP and Med Supp or just PDP (like the AON/ATT deal).

    5 companies, 11 plans on PDP. Out of the 25 available.

    TI is stonewalling on producing the COC. (Don't say a word Somarco :) ) Its going to be lots of fun.....
     
    kgmom219, Oct 13, 2015
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  6. Justin Bilyj
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    Justin Bilyj Guru

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    OPERS is using OE, but wont reimburse HRA funds if you dont enroll completely through them.
     
  7. somarco
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    somarco GA Medicare Expert

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    Another challenge in dealing with retirees that got the boot is this. Many are not newly enrolled in Mcare B so must go the GI route which rarely pays the agent enough to make it worthwhile.

    If you have someone that is a new retiree (T65) they have more options.

    You also have to deal with the mindset of long term employees who believe their company would always take care of them and never foist them into a situation where their retiree medical would be directed by a $15/hr clerk. You try to educate them but they remain close minded.

    Move on to the low fruit.
     
    somarco, Oct 14, 2015
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  8. kgmom219
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    kgmom219 What's Next?

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    TI made then enroll in Part B at age 65.

    And for anyone who comes across this thread later, the FAQ's on the TI Alumni site show medical OR prescription through One Exchange. The FAQs at One Exchange are ambiguous.
     
    kgmom219, Oct 14, 2015
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  9. Justin Bilyj
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    Justin Bilyj Guru

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    Not sure if we have any law majors out there, but on what grounds would someone be able to sue regarding OE and receiving hra reimbursements?
     
  10. somarco
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    somarco GA Medicare Expert

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    I had a private correspondence with a former legal counsel for Aon that confirmed what I had posted (over a year ago) about the illegal nature of the handcuff for HRA funds. She confirmed everything I said and went further.

    She had advised Aon to stop setting up contracts with the handcuffs and they told her it was none of her business. She also concurred that nothing would be done until enough people complain to the DOL and they open an investigation.

    Forget about that route.

    Lois Lerner's emails will be found before Aon or TW is prosecuted for tie-in violations.
     
    somarco, Oct 14, 2015
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