Company e-mail: Megacorp health plans changing

[ziggy29]

Just got a memo from our HR team to all U.S. employees confirming some details about changes to benefits, primarily health benefits. They are doing a couple of changes that are becoming more widespread:

(1) Looks like they are rolling out an HSA option. They didn't say "HSA" specifically but they mentioned the addition of high deductible health plans which can increase retirement savings, so it's obvious that one can draw that inference. We already have high deductible options, but they are funded with an HCA that has a maximum balance and doesn't come with you, unlike an HSA. I'll be interested to see how the deductibles, employer account contributions and premiums are different between the non-HSA high deductible plans and an HSA.

(2) Megacorp is rolling out "incentives" for wellness to "get and stay" healthy. Right now it sounds like only "carrots" -- extra goodies if you do some of the right things -- but I suspect in a couple of years this will also include "sticks" (penalties and increased premiums for failing to comply to "wellness" directives). At this point that's just speculation.

I'm really curious to see how they implement these things. It may be a glimpse into the future.

[Achiever51]

May be a glimpse into the future? You betcha.

My Megacorp started with minor changes in the health care plans...then larger ones...then required employees to pay a portion of their health care plans...which grew to a larger piece based on the increases in the costs of health care. Then retirees had to pick up a piece of the increased costs of health care...which is growing year to year. Now retirees have been notified that at age 65, Megacorp will no longer provide health care -- rather Megacorp will expect that retirees get the majority of their health care via Medicare and a Part D supplement, which Megacorp will help offset with a set amount deposited into the retiree's HSA.

[ziggy29]

Quote:

Originally Posted by Achiever51 Now retirees have been notified that at age 65, Megacorp will no longer provide health care -- rather Megacorp will expect that retirees get the majority of their health care via Medicare and a Part D supplement, which Megacorp will help offset with a set amount deposited into the retiree's HSA.

What am I missing? I didn't think you could even contribute to an HSA after you reach 65.

Still, I'd prefer the HSA to the current HCA option in principle, since I'd be able to keep whatever is in there when I leave Megacorp, and there's no $3,000 maximum accrual in the HSA like there is in the current HCA. I just wonder how much they have to raise the deductible or the premium to pay for the fact that the cash can't revert back to Megacorp in the HSA if their contributions exceed the HCA maximum or go back to them in case of termination.

[Achiever51]

oops, my mistake! You are right in pointing out that after age 65, you cannot contribute to an HSA. I should have said "HRA" (Health Care Retirement Account - a new defined contribution account for retirees over age 65 whereby MegaCorp will contribute $1,750 annually for a retiree and an additional $1,750 for a spouse to provide funds to supplement their Medicare coverage) not "HSA". This was how my MegaCorp announced these changes:

MegaCorp also will increase monthly health insurance premiums for current and future retired salaried employees who are younger than age 65 based on salary level at the time of retirement and will establish health care retirement accounts for retirees older than age 65. MegaCorp retirees younger than 65 who had annual salaries of $50,000 or less when they retired will pay half of any future increases in health insurance premiums, and those who had higher salaries will pay a larger share. MegaCorp retirees younger than 65 who had annual salaries of $171,000 or more will pay 100% of future increases in health insurance premiums. For MegaCorp retirees ages 65 or older, the company will contribute $1,750 annually for retirees and $1,750 annually for spouses or partners to health retirement accounts. MegaCorp said that retirees ages 65 and older will pay about $5,100 in health insurance premiums and out-of-pocket costs in 2006 but added that the amount should decrease to about $3,150 in 2007 through the plan.

[ziggy29]

Got a little more "teaser" material from Megacorp yesterday. Looks like what used to be an up-to $2,000 annual company contribution in the HCA (which was not portable and capped at $3,000) will become an unqualified $500 annual contribution to the HSA with the potential for more matching if we jump through the appropriate "wellness hoops" (which I might or might not do depending on the additional amount and how intrusive it is).

No word yet on what the family deductible would be or how the cost would compare to our current high-deductible offering ($3,000 family deductible with the HCA). As of now our share of the premium is about $170 a month, so if the new plan has a lower premium, I could see what the different multiplies by 12 would be to see what I could add to their $500+ in the HSA for the same premium I'm paying now.

It will also be interesting to see how the cost will compare to their low-deductible PPO.

[ziggy29]

Wow. Just got one of the two parts of our open enrollment mailings.

The difference in cost between the traditional PPO option and the HSA option (for employee and spouse coverage) is only about $100 per month. Unless the deductible associated with the HDHP is near the minimum $2200 required by law, it would seem that the PPO will be the better option, especially since the PPO includes first-dollar coverage on prescriptions, and my wife takes three of them (none generic). I won't know until I get the full packet and see plan specifics.

In other watered-down benefit news, we will be paying a lot more for a more restrictive MetLife dental plan this year (employee-share premiums are doubling) and there's no in-network dentist within 30 miles in the new plan (compared to three here in town with the current BCBS plan). For over $400 a year in employee contributions I find it sorely tempting to decline dental this year.

[runchman]

Our mega-corp is starting to charge $62.50 per month additional if you are a smoker.

Not a good time to be a smoker! (which fortunately I am not).

- John

[bssc]

Sounds like the same here.

All plans gone except the High Deductable plan and one HMO which will probably go away next year. Megacorp is contributing a total of $400, 200 up front and the balance over the last 6 months of the year. The rest of the $1100 deductable is up to us. We get a $15 a paycheck bonus if we certify ourselves as non-smokers or smokers trying to quit.

Dental and vision stayed the same.

For more on the history of high deductable plans and how they control costs, see here

[lets-retire]

Quote:

Originally Posted by ziggy29 The difference in cost between the traditional PPO option and the HSA option (for employee and spouse coverage) is only about $100 per month. Unless the deductible associated with the HDHP is near the minimum $2200 required by law, it would seem that the PPO will be the better option....

I think that is one of the reasons the high deductible plans haven't been so popular. It seems the insurance companies are wanting the insured to take more of the risk, but aren't willing to compensate people for it.

[PBAT]

I am no big fan of the health insurance companies, but I think in some cases, at least my minicorp, the employer is not passing all of the savings to the employees.

When we switched from a traditional PPO to a HDHP this year, the company did not adjust our premiums. However, they funded our HSAs for the full deductible, and plan to do so each year. In the open enrollment meeting, they acted as though they were saints giving us charity. Later HR unofficially confirmed that it is costing the company less to do this, than they paid for our PPO last year.

[ziggy29]

Quote:

Originally Posted by lets-retire I think that is one of the reasons the high deductible plans haven't been so popular. It seems the insurance companies are wanting the insured to take more of the risk, but aren't willing to compensate people for it.

Maybe, maybe not. Maybe group insurance is different, but when I price individual policies and compare a low-deductible PPO and an HSA-eligible HDHP for two adults, the price difference seems to be closer to $300 a month, give or take -- not $103 a month, which is the difference here.

So in this case, I think the employer is pocketing a lot of the savings, though they are contributing at least $500 a year to the employee's HSA, with the potential for more (but I don't know how much more yet). I know so far they've announced a potential for an extra $225 with more to come. Depending on how much more, it might seem like a better deal. Hopefully I'll get the packet today since I got the supplemental "worksheet" listing the prices of various benefit options yesterday.

If the HDHP deductible is the lowest allowable ($2200 for family) or close to it and there's going to be potential for considerably more company contributions to the HSA, it could still be the way to go. We'll see.

[jIMOh]

I am enrolling in an HSA. My wife is using the HMO offered by her employer.

Main reasons:

1) I rarely if ever see a doctor
2) My company contributes $750 to my HSA just by signing up.
3) HDHP costs me $16/check
4) Wife is pregnant with twins- the delivery alone using HDHP suggests we would pay close to $2000 out of pocket, and once the babies are delivered, the annual maximums reset (because of plan change).
5) plan is for kids to be on wife's policy from June-December, then shift them to HDHP in Jan 09 with me where well visits are free.

[ziggy29]

I guess to be fair, I should also point out that there is one very positive change to our health insurance options this year: the $2 million lifetime cap has been eliminated. That's all we were told; I don't know if that means it's unlimited or not, but the CEO did say "eliminated," not "raised."

Still don't have the detailed plan info which would tell me that, though. Still, if I'm going to pan some things, I should also give kudos where they are due. That's a very welcome change.