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Retiree medical coverage to change

By Erin Long | Emory Report | April 18, 2014

Beginning Sept. 1, Emory will change the way retiree medical coverage will be provided for current Medicare-eligible retirees. Emory University and Emory Healthcare retirees, and their covered spouses or same sex domestic partners (SSDPs) who are over the age of 65, will transition from Emory's medical plan with Aetna to a Medicare health insurance exchange. This change will allow retirees to shop for and purchase an individual plan that works with their Medicare coverage.

"The main reason we are making this change is to better serve the needs of our retirees who have continually asked that we provide a more affordable, flexible medical plan option," explains Theresa Milazzo, associate vice president, Human Resources.

Currently, about 40 percent of Emory's retirees opt out of Emory's retiree medical coverage largely because of the cost of the current plan, Milazzo says.

The switch to a Medicare health insurance exchange will provide more flexibility by offering post-65 retirees many different options of health plans. Analysis by health actuaries shows that more than 95 percent of post-65 retirees would see their out of pocket costs for health care decrease while receiving similar or better coverage through the exchange.

"This new approach really opens the door to a wide variety of coverage options available in today's marketplace," adds Milazzo. "Retirees will now have many options that not only provide excellent benefits and coordinate easily with Medicare, but at a potentially lower cost as well."

Emory will provide eligible post-65 retirees and covered spouses/SSDPs with a subsidy — currently $100 per month each — through a tax-free Health Reimbursement Account (HRA) to help them pay for premiums and other eligible health care expenses. Emory will also provide free, unbiased benefit advisers through an external vendor to help retirees understand their options and to enroll in plans that will best meet their needs.

Laying the groundwork for change

The change in retiree medical coverage comes after years of research, analysis and meetings with Emory retirees, current University faculty and staff, and various committees and councils including the Fringe Benefit Committee, Emeritus College, the Employee Council and the University Senate.

For the past three years, Emory's benefits department held numerous meetings with retirees to get their input. Gray Crouse, professor of biology and senior director for faculty affairs in the Office of the Provost, conducted 10 campus-wide meetings with current and retired Emory faculty and staff in the fall of 2013 in order to explain the proposed changes.

"Most of these meetings began with a fair amount of skepticism, but as participants began to understand the proposed changes, they realized how many people would be helped, particularly those retirees with lower incomes or those who choose to move from the Atlanta area," says Crouse.

The change will immediately impact only those retirees over age 65. Retirees under age 65 will remain on the Aetna plan until they reach age 65. For current faculty and staff, the change will only impact those hired before Jan. 1, 2003 who plan to retire from Emory and enroll in retiree medical coverage  when they (or their covered spouse/SSDP) turn 65.

Emory employees hired after Jan. 1, 2003 are not eligible for subsidized retiree medical coverage due to a policy change implemented in 2002. They will not be eligible for an HRA provided by Emory. However, if they meet the criteria for retirement, they will have access to the benefit advisers for assistance in enrolling in Medicare supplemental coverage for themselves and their spouses/SSDPs, if they are 65 or over.

"We are very pleased to be able to offer our retirees a better way to receive medical coverage," adds Peter Barnes, VP of Human Resources. "It will have an enormous impact by giving them access to much more flexible, cost effective plans."

All current Emory retirees will receive notification of the change in April and will receive more details, including enrollment materials, in June. For more information about the changes to retiree medical coverage, view the frequently asked questions on the HR website.