As your members begin to think about retirement solutions for their health care, it's vital that they keep up with major changes in retiree health coverage. Considering that over 17 million retirees depend on employer-sponsored coverage for primary and secondary supplemental benefits, the potential loss of that coverage could be devastating.
Here's what you need to know to help your members secure the coverage they need to enjoy a long and healthy retirement.
According to Plan Sponsor, a steady fall in the number of employers offering health benefits to retirees in recent decades has left many retirees in a bind. Unable to afford a private plan that provides the comprehensive coverage they're accustomed to, retirees can find themselves between a financial rock and a health care hard place.
At one time, union members could rely on a presumption of lifetime benefits through their collectively bargained agreements. But a unanimous 2015 Supreme Court decision relating to union contract interpretation means that employers "may now have more freedom to alter, reduce or eliminate the health care benefits they provide to retired union workers," according to Bloomberg BNA.
In light of these challenges, the Center for Medicare and Medicaid Services (CMS) urges care and planning around retirement health benefits. While Medicare is the first to pick up medical bills, with retiree coverage following up second, retirees may be advised to purchase Medigap coverage for any bills still not covered.
The CMS notes that retirement group health plans may have different rules from plans before retirement or may work differently with Medicare. Again, employers may also change or cancel coverage.
This is why it's so important to do what you can to help your members understand exactly what coverage they have as they move toward or enter retirement. Who and what is covered, and what exactly are the terms of that coverage? How much should retirees expect to pay? What do members need to know about how Medicare affects their coverage and whether they should buy a Medigap policy? When do they need to act?
The Medicare Advantage Program
Growing in popularity, employer-group Medicare Advantage (MA) health plans may offer retiring members high-quality care at affordable costs, according to Mark Farrah Associates. MA plans are created specifically for businesses and union groups to provide full health benefits to retirees — Medicare Parts A and B, along with a mix of other coverage, traditionally.
First brought to market in 2003, MA plans work by providing fixed payments to furnish retirees with their Medicare benefits, with an employer-paid premium for additional coverage. While MA plans can be contracted through the CMS, benefits administrators may prefer to engage a private insurer for their retirement solutions, as this can result in cost savings by shifting administrative responsibilities and insurance risks onto the plan itself.
And unlike other plans, Medicare Advantage may boast enhanced benefits like disease management and coordinated care. This can help contain costs while also improving members' overall health — and their satisfaction with the program.
Take care to educate your members nearing or past age 65 about the ways the retirement health care landscape has shifted since they started their careers and the ways the Medicare Advantage program can help fill the gaps. And to help younger members look ahead, now is the time to share as many resources as possible for saving for retirement.
Tracey Lewis, journalist and author, focuses primarily on B2B health care, financial services and other internal corporate communications. Author of a best-selling, pop-culture book published by Random House Books, and a trained oral historian, Tracey also enjoys delving into music, arts and film content. Skilled in SEO optimization and digital storytelling, she knows how to collaborate with communications, policy, research, legal and designer teams to create and execute cohesive content strategies.