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IBM Medicare Coverage Overhaul
• Current IBM coverage for medical, dental & vision care will be
discontinued 12/31/2013
• IBM subsidy will continue through Health Reimbursement
Arrangement (HRA)
• Must work with Extend Health and enroll in a medical plan or
prescription drug plan to receive HRA
• No group plans - - retiree and spouse will enroll in individual plans
– Offers flexibility to sign up for a plan based on individual’s health status
– However, adds to enrollment process
Exception: Those currently enrolled in Aetna Medicare Plan A
(HMO) and Aetna Medicare Plan B (PPO) can continue with these
plans along with IBM offered dental and vision plans for up to two
years with the option to convert at the end of 2014.
Will not be eligible for HRA. Not need to return the Spousal
Selection Form
Who is Extend Health?
• Largest private Medicare exchange serving over 500,000
Medicare retirees
– Acquired by Towers Watson in May 2012, will be renamed to
Towers Watson come January 2014
• Extend Health is now your primary contact for enrollment
and ongoing support for your health care coverage for
2014 and beyond
– All benefit advisors are expected to be trained but there are
growing pains
Note: For more details on Extend Health, visit www.itbrc.org
to see the presentation given by Extend Health
All About Health Reimbursement Arrangement (HRA)
• A tax-free account which can be used to pay for eligible out-of-pocket health care costs:
– Premiums for medical, prescription, dental & vision care plans – Deductibles, Co-Pays and Co-Insurance
– Medicare Part B Premiums
• IBM will contribute annually to your HRA if you were receiving subsidized group coverage
• If you and your spouse are both IBM retirees and Medicare-eligible, each of you are eligible for your own HRA. A joint account will be setup for the total amount unless otherwise requested
• HRA must be funded by IBM, you can not contribute to an HRA (IRS rules)
• If you don’t use your annual HRA allocation, it will not roll over
• If you have an FHA account, it will be transferred into an HRA and will roll over year to year till all depleted
• Extend Health will serve as the administrator for your HRA account
All About Health Reimbursement Arrangement (HRA)
(Continued)
• To receive your HRA contribution, you, the retiree (or surviving spouse), must enroll in medical and/or drug plan through Extend Health
– Once you enroll in a medical plan through Extend Health, it’s not necessary for your spouse to enroll in a medical plan through Extend Health. You and your spouse can enroll in
prescription, dental and vision plans on your own and submit claims for premiums and other medical expenses for reimbursement
• Non-Medicare eligible spouse/dependent can not enroll through Extend Health but is eligible to draw upon retiree HRA for medical, dental, vision care premiums and expenses, same as the retiree
– See presentation for Non-Medicare Eligible Spouse for more details
• Make sure your spouse/dependent is included in Extend Health database
• Reimbursements
– You will first pay all premiums and other out-of-pocket expenses – Auto reimbursement for select medical plans
• Premiums will be withdrawn from your bank account
• Extend Health will reimburse you with a check
– Manual process for all other expenses. Submit claims with valid receipts, etc. till HRA is depleted
IBM Subsidy for HRA
IBM aggregate contribution to HRA’s will be consistent with prior years
RetirementDate
Without Surviving Spouse Option
Now Surviving Spouse
With Surviving Spouse Option
Now Surviving
Spouse Retiree
Already Deceased
Medicare- eligible Surviving Spouse Before
Jan. 1, 1992
$3,500 0 $2,600 $1,300 $1,300
On or after Jan. 1, 1992
$3,000 0 $2,374 $1,187 $1,187
- You must make your selection on Survivor Selection Form and return to reach IBM
vendor by 12/16/2013
- Default is Spousal Coverage meaning lower amount even if there is no spouse or
Next Step
Choose the best coverage while
optimizing the use of available funds:
• Annual HRA (or FHA)
• Annual SHAP, if eligible
2013 Options vs. 2014 Coverage
2013 Options
Medicare Supplement Plans:
-IBM Medical Supplement
-IBM Medical/Prescription Drug Supplement -IBM Medical/Prescription Drug Supplement Plus No medical coverage until you reach max out-of-pocket
-Aetna Traditional Integration Plan A or Plan B (Medigap)
Medicare Advantage Plans:
-Humana Medical Plan (HMO)
-United Healthcare of Florida (HMO/PPO)
-Aetna Medicare Plan A (HMO)
2014 Coverage
Options for comprehensive Medical coverage and lower cost Flexibility with individual plans
Single: Lower cost for similar coverage Couple: Higher cost for similar coverage
Better Value with more options Choose a similar HMO Plan
Better Value with more options Choose a similar PPO Plan
Can stay up to 2 years (no HRA)
May get better value by switching to a “street” HMO Plan
Medicare Plan Types
Option 1
Medigap + Part D Rx
Option 2
Medicare Advantage Plan Name Plan F, N, C, etc PPO, HMO, etc
Medicare Supplement to Original Medicare Pays instead of Medicare (You assign your Medicare benefits to the insurance provider)
Costs Pay Up Front Pay As You Go
Premiums Higher Monthly Premium Zero to Low Monthly Premium
Co-Pays $0 Co-pays (Plan F) Co-pays, Co-insurance
Doctors/Medical Facilities
Any Doctor/Facility that Accepts Original Medicare
Networks, PCP
Portability Benefits Travel with You Only Emergency Coverage When Out of Network Area
