IU Retiree Status

1. IU Retiree Status Health Care Options Susan Brewer University Director of Health Care and Welfare Program Services IUPUI Pre-Retirement Symposium March 25, 2010

2. IUPUI Pre-Retirement Symposium This presentation does not reflect any potential changes related to recent Health Care Reform legislation

3. IUPUI Pre-Retirement Symposium IU Retiree Status Health Care Options • Who’s eligible? • What plans are available? • Under age 65 • Age 65+ • Some Rules and Considerations • Medicare Part D prescription coverage

4. IUPUI Pre-Retirement Symposium Resources • University Benefits web page http://hr.iu.edu • Participant Rights & Responsibilities • New online benefits video

5. IUPUI Pre-Retirement Symposium IU Retiree Status Health Care Options

6. IUPUI Pre-Retirement Symposium New Benefits Video

7. IUPUI Pre-Retirement Symposium Who is Eligible? • Employees with “IU Retiree Status” (meet age and length-of-service criteria) • Their dependents covered at the time of termination (or at the time COBRA ends)

8. IUPUI Pre-Retirement Symposium IU Retiree Status • At ages 60, 61, 62 employees covered by PERF on the date of termination will qualify with at least 15 years of IU service. • Years of IU service are pro-rated for ages that fall between the ages listed above.

9. IUPUI Pre-Retirement Symposium IU Retiree Status • Years of IU service – full-time, appointed service excluding periods of leave without pay. Sabbatical leaves and leaves for purposes of research of distinction are included.

10. IUPUI Pre-Retirement Symposium IU Retiree Status Benefits • Health Care • Life Insurance • Fee Courtesy • Retain IU Email Address • Other Campus-Specific Benefits

11. IUPUI Pre-Retirement Symposium Health Plan Options (As of January 2010) • Retirees may move to their spouse’s IU coverage and retain eligibility. • Temporary Continuation of Active Employee Coverage – “COBRA” • Under age 65 (i.e., not Medicare eligible) • IU PPO $900 Deductible • Age 65+ (i.e., Medicare eligible) • Blue Retiree Plan supplement (Insured by Anthem)

12. IUPUI Pre-Retirement Symposium “Rules” for Retiree Health Coverage • Those retirees eligible for Medicare MUST carry Medicare Parts A & B; and must carry a Medicare D plan in order to have prescription coverage. • Retiree/Spouse may split coverage between plans when one is over and one is under age 65 • Cannot reinstate after dropping IU-sponsored coverage • Generally cannot add new dependents

13. IUPUI Pre-Retirement Symposium COBRA Option – Federal program for all employees losing coverage • Temporary Continuation of Active Coverage (PPOs or HDHP/Medical Savings and/or Dental) • 18 months (however, COBRA medical ends if you become Medicare eligible after enrolling in COBRA) • Advantages: • Keep Dental Coverage (dental is not a retiree benefit) • Maintain Open Enrollment Options (e.g., add dependents) • Keep PPO Blue Access (not a retiree option)

14. IUPUI Pre-Retirement Symposium Options Under Age 65 • Same PPO $900 Deductible plan as active employees, except: • Premium is the same as COBRA rate • You can think of this plan as a continuation of COBRA medical coverage until you reach Medicare eligibility. • Dental coverage is not a Retiree option, but you may continue it for 18 months under COBRA

15. IUPUI Pre-Retirement Symposium 2010 Premium Rates IU PPO $900 Deductible Plan – Under Age 65 (same as COBRA Rates) • One Participant $ 404.20 • Participant and Child(ren) $ 806.25 • Retiree and Spouse $ 985.63 • Retiree and Family $ 1,119.33

16. IUPUI Pre-Retirement Symposium What is the Advantage of IU-sponsored Coverage? • You don’t have to show “proof of insurability” or fill out a health questionnaire. • There is no pre-existing condition exclusion. • The premium is not based on your ‘enrolled’ or ‘attained’ age • The premium is not based on lifestyle factors such as smoking, weight, or on prescription drug use, etc. • Prescription benefit: no maximum and copays are low

17. IUPUI Pre-Retirement Symposium Commercial Plan Cost Comparison • Female, age 63 • No pre-existing conditions; non-smoker; not overweight • $2,000 deductible • $30 visit copay (only 2 visits covered, i.e., major medical coverage only) • 30% copay In-Network, 40% copay Out-of-Network • $5,000 copay maximum • $500 prescription coverage limit; $200 Rx deductible • Estimated Premium: $352.16/month(coverage may be denied based on risk factors)

18. IUPUI Pre-Retirement Symposium Commercial Plan Cost Comparison • Female, age 63 • No pre-existing conditions; non-smoker • $500 deductible • $30 primary care/ $40 specialist visit copay • 20% copay In-Network, 40% Out-of-Network • $3,000 copay maximum • Prescription Coverage: $15/ $30w/ $250 deductible and 40% up to $4,000 maximum benefit • “Base Premium”: $658.88/month

19. IUPUI Pre-Retirement Symposium Options Age 65 and Over Anthem Blue Retiree Plan • Medicare Supplement or “Medigap” coordinates with “Original Medicare” • Pays Medicare deductibles and copays • Includes a wellness benefit (in addition to Medicare preventive coverage) • No prescription coverage (you must elect a Medicare Part D plan to have prescription coverage)

20. IUPUI Pre-Retirement Symposium Age 65 and Over Anthem Blue Retiree Requirements: • You must be Medicare Eligible (Age 65+) • You must enroll in Medicare Parts A & B • If you want prescription coverage, you must enroll in Medicare Part D

21. IUPUI Pre-Retirement Symposium Some Things to Consider • There is no need for 2 Medicare Supplements • A Retiree may switch to spouse’s IU coverage and retain eligibility for IU Retiree coverage options whether spouse has IU Retiree Status or not • Compare non-IU Plans (Examples: AARP, BC/BS, RIPEA, etc.) • In some areas, Medicare Advantage plans (HMO and PPO) may be available—they combine medical and prescription coverage in one plan and one premium. Clarian has one such plan.

22. IUPUI Pre-Retirement Symposium Clarian Health Plan Medicare Advantage • You pay Medicare Part B premium plus one HMO premium with includes both medical and Rx • Uses a Clarian HMO network • 4 plan options: Value, Select, Select+, Choice • Premiums: $0, $37, $67, $93 • Plans have fixed-dollar copays on most services, e.g. office visits, inpatient per day, Rx • www.clarinhealthplans.org 800-455-9776

23. IUPUI Pre-Retirement Symposium www.medicare.gov

24. IUPUI Pre-Retirement Symposium What Does Blue Retiree Coverage Cost? • The Retiree pays the full cost of coverage. • Premiums Change Annually with inflation, but otherwise are not based on age • For PPO retiree and dependent coverage, when one is ‘under 65’ and one is ‘over 65,’ separate premiums must be added together.

25. IUPUI Pre-Retirement Symposium 2010 Premium Rates Blue Retiree Plan – Age 65+ • One Participant $175.29 • Retiree and Spouse $350.58 • Note: to obtain the total cost, you must add the cost of Medicare B (about $100) and a Medicare D prescription plan (about $28 to $100).

26. IUPUI Pre-Retirement Symposium Premiums – Other Commercial Plans Most commercial plans are based on age ratings: • Issue-age-rated • Attained-age-rated May also begin at an “introductory” discount price that ends after the introductory period. After your Special Enrollment Period, you can be denied coverage; have coverage delayed; or have the premium based on health factors.

27. IUPUI Pre-Retirement Symposium Premiums – Other Commercial Plans Issue-age-rated: Rate is based on your age at the time you buy the policy • Younger pays less; older pays more • Rates can go up based on inflation and other factors, but not due to age • Example: • Retiree A, age 65, buys a plan pays $160/month; • Retiree B, age 72, buys the same plan and pays $190/month.

28. IUPUI Pre-Retirement Symposium Premiums – Other Commercial Plans Attained-age-rated: Rate is based on current age • As you get older, the rate goes up based on your age. Rates can also go up based on inflation and other factors. • These plans are the least expensive to start and may become the most expensive over time • Example: • Retiree C, age 65, buys a plan and pays $140/month; at age 66 pays $150…. and by age 75 has gone to $200/month.

29. IUPUI Pre-Retirement Symposium Medicare Enrollment • Medicare open enrollment is a 6-month period: starts first month in which you are both age 65 and enrolled in Medicare Part B. • During this open enrollment you cannot be denied a supplement plan, charged higher premiums for health factors, or be made to wait for pre-existing condition coverage. • Those with Medicare can switch plans between January 1 and March 31 each year.

30. IUPUI Pre-Retirement Symposium Medicare Part D Notice • Federal law requires employers to notify employees of certain Medicare prescription drug information, deadlines, and penalties. • IU’s notice is printed annually in the Informed Employee bulletin and at http://hr.iu.edu • IU covered employees do not pay a penalty to enroll in Medicare Rx plan within 63 days of retiring. • Premium penalties after 63 days are significant • Note: there is no 63-day grace period when COBRA ends

31. IUPUI Pre-Retirement Symposium Finding a Medicare D Plan

32. IUPUI Pre-Retirement Symposium Other Retiree Status Benefits • Retiree Life Insurance • $6,000 in IU-paid life insurance • Keep beneficiary current! • IU Tuition Benefit • Same benefit as active employee • Keep IU Email Address

33. IUPUI Pre-Retirement Symposium Other IUPUI Campus Benefits • Discount on non-credit classes through Continuing Studies • Employee prices on hardware, software, and technology workshops through UITS • Employee prices at IUPUI sports facilities

34. IUPUI Pre-Retirement Symposium Separation Pay • Staff employees receive pay for certain accrued paid-time-off benefits • 2010 tax rates for separation pay: • Federal • State • County • FICA • Consider deferring separation pay to supplemental retirement plans

35. IUPUI Pre-Retirement Symposium Separation Pay • Support and service staff: • Accrued holidays • Accrued compensatory time • Vacation hours up to the maximum allowed per university policy • Pro-rated sick time for accrued sick hours in excess of 152 hours if enrolled in PERF or IU Retirement Plan 11.25%

36. IUPUI Pre-Retirement Symposium Separation Pay • Professional staff: • Accrued holidays • Accrued compensatory time, if applicable • Accrued PTO hours • Accrued honorary vacation (if applicable) up to the maximum allowed per university policy • Pro-rated sick time for accrued sick hours in excess of 152 if enrolled in PERF or IU Retirement Plan 11.25%

37. IUPUI Pre-Retirement Symposium University Human Resource Services http://hr.iu.edu Click “Benefits”