AllyriaRedbird
Expert
- 71
Somarco said "What really singes me more than the seamless conversion is large employers that have terminated their retiree plan and replaced it with an HRA. They usually contract with someone like Towers Watson to administer the plan and counsel soon to be retirees on their options.
Employees are encouraged, and sometimes bound contractually, to purchase coverage only through the "exchange" established by TW. If they buy elsewhere they lose the $1500/yr HRA contribution.
Some plans require employees to buy all their Medicare coverage (MA or Medigap) through the consultant, others say the retiree must buy something (such as a PDP) and recently I ran across one group that imposes no restrictions whatsoever. Retirees can buy coverage anywhere and still get the HRA dollars."
I agree, most retirees are confused by this and when their premium goes up, the begin to realize that what they signed on for initially dollar-wise is the limit of their benefit amount forever.
Most don't know that by allowing Towers Watson or One Exchange, etc. to sign them up defines their dollar reimbursement and coverage, essentially freezing both in time forever. Retirees will lose the reimbursement for their initial plan choice if they switch to a lower priced premium with another carrier later on.
This happened with a Sandia National Labs retiree recently, who allowed Towers Watson to sign him up for a UHC AARP Plan F and Part D when he retired, which cost less that $1350.00 per year then, all told. After he lost his discount of 30% on the UHC AARP Plan F, at age 71, he had to start paying more than the allotted amount of $1650.00, and wanted to switch to a less expensive premium Plan G, one I recommended.
Unfortunately, he called the HR department and they said that if he switched he would lose the entire reimbursement of $1650.00 for his Medicare Supplement and Part D. They must have told him, and he either forgot or just didn't want to bother finding his own plan in the beginning, so he took their deal.
This practice is misleading, and almost as abhorrent as an automatic Medicare Advantage sign-up, but not quite. Automatic enrollment in Medicare Advantage is egregious and borders on criminal. Choice is king.
Employees are encouraged, and sometimes bound contractually, to purchase coverage only through the "exchange" established by TW. If they buy elsewhere they lose the $1500/yr HRA contribution.
Some plans require employees to buy all their Medicare coverage (MA or Medigap) through the consultant, others say the retiree must buy something (such as a PDP) and recently I ran across one group that imposes no restrictions whatsoever. Retirees can buy coverage anywhere and still get the HRA dollars."
I agree, most retirees are confused by this and when their premium goes up, the begin to realize that what they signed on for initially dollar-wise is the limit of their benefit amount forever.
Most don't know that by allowing Towers Watson or One Exchange, etc. to sign them up defines their dollar reimbursement and coverage, essentially freezing both in time forever. Retirees will lose the reimbursement for their initial plan choice if they switch to a lower priced premium with another carrier later on.
This happened with a Sandia National Labs retiree recently, who allowed Towers Watson to sign him up for a UHC AARP Plan F and Part D when he retired, which cost less that $1350.00 per year then, all told. After he lost his discount of 30% on the UHC AARP Plan F, at age 71, he had to start paying more than the allotted amount of $1650.00, and wanted to switch to a less expensive premium Plan G, one I recommended.
Unfortunately, he called the HR department and they said that if he switched he would lose the entire reimbursement of $1650.00 for his Medicare Supplement and Part D. They must have told him, and he either forgot or just didn't want to bother finding his own plan in the beginning, so he took their deal.
This practice is misleading, and almost as abhorrent as an automatic Medicare Advantage sign-up, but not quite. Automatic enrollment in Medicare Advantage is egregious and borders on criminal. Choice is king.
