My Megacorp is changing our retiree medical

[supernova72]

Hello,

For 30+ yrs our retiree medical has been thought of as the gold standard and known as Magacorp Traditional Plan. $20 monthly premium and $300 deduct with reasonable co-pays. I know---off the charts goodness.

So fast forward---August 2015. We non-Union "heritage" employees hired before 1999 will have increased costs "unless you retire by 12/31/2015".

Interesting timing since we won't actually know the new costs 2016 and on until open medical enrollment beginning November 9th.

The retirement benefit office has been as helpful as possible in explaining what those costs are in 2015 plans.

It would be $45 a month for a single. Same deduct, same co-pays. What we don't know is how much those rates will go up 2016 and on (retirees will pay the same as current employees).

Another interesting option is for those retiring 2016 and later is the newly offered "Advantage Plus" plan. For current employees that is a $1300 deductible with company contribution of $1025 to HSA. I've been on it for 2.5 yrs now. Good plan with few surprises.

If we choose to retire in 2016 (or later) there would be no company contribution to the HSA. BUT---you can max out your HSA up to the IRS limits.

FYI: I turn 55 this year and that is our ER date at Mega. I was planning on working about two more years...hmm. Our pension is also being "frozen" at the end of 2015. We've known this for two years now so no surprise.

Just curious if any other of folks similar or the same Megacorp feel about this? Not sure if we'll see a mass exodus at the end of 2015 just to take advantage of inexpensive retiree medical?

Decided not to name the company so PM me if you would like more!

 

[kimcdougc]

We retired in February of this year from megacorp. We found out our "retiree medical benefits" was going to cost us $2,300 per month. No thank you.We currently are doing the Cobra for 18 months then onto Obama care for around $1300 per month. Just facts of life I guess. Take advantage of the inexpensive retiree medical insurance but note that they can change it all whenever they want.

 

[jim584672]

I never qualified for "retiree medical" being under 55 yo. Don't feel like I am missing much since they can take it away or change it at any time. Just a matter of time before the hammer falls and poof gone.

 

[Teacher Terry]

In your situation I would retire before the end of the year. We were government employees & retiree insurance costs way more then when you are active. We pay $900/month.

 

[emerytura]

Retiried at 53 from Megacorp, and "bridged to retire medical "at 55. Monthly cost for two $802 per month. $500 deductible per person, 80/20 coverage, and $5000 max out of pocket per year per family. What you have is very good deal.

 

[supernova72]

OP here: I'm sensing that even with our rates going up we still have a good deal based on the feedback here. I appreciate the responses. I also realize that "legally" it could actually be eliminated all together if Megacorp so choses.


I'll appreciate what we have until more changes come if they do. Thanks again.

 

[supernova72]

We retired in February of this year from megacorp. We found out our "retiree medical benefits" was going to cost us $2,300 per month. No thank you.We currently are doing the Cobra for 18 months then onto Obama care for around $1300 per month. Just facts of life I guess. Take advantage of the inexpensive retiree medical insurance but note that they can change it all whenever they want.

Thanks for the feedback. I was wondering about ACA and how it might actually be "better" than some plans offered.

 

[supernova72]

In your situation I would retire before the end of the year. We were government employees & retiree insurance costs way more then when you are active. We pay $900/month.

Thank you. This is a reality check indeed on the cost side.

 

[supernova72]

Retiried at 53 from Megacorp, and "bridged to retire medical "at 55. Monthly cost for two $802 per month. $500 deductible per person, 80/20 coverage, and $5000 max out of pocket per year per family. What you have is very good deal.

another reality check. Thanks.

 

[Texas Proud]

OP here: I'm sensing that even with our rates going up we still have a good deal based on the feedback here. I appreciate the responses. I also realize that "legally" it could actually be eliminated all together if Megacorp so choses.


I'll appreciate what we have until more changes come if they do. Thanks again.

To get a feel for your costs if you had to go it alone, go to the ACA website and see how much a platinum plan would cost you... that is pretty much what you have...

For me, with family of 4, it would be $1800 to $2200 per month... you can go to ehealthinsurance.com to get a quote...

 

[utrecht]

Retiried at 53 from Megacorp, and "bridged to retire medical "at 55. Monthly cost for two $802 per month. $500 deductible per person, 80/20 coverage, and $5000 max out of pocket per year per family. What you have is very good deal.

You have pretty good deal also. I have a $3000 deductible for 70/30 coverage and $6350 max out of pocket per person. $12700 max out of pocket per family. Cost for 2 is about $1000 per month.

 

[HBD2019]

Well that is too bad. I am hanging in there to get to my 55th bday and retire with that benefit. (My company has (had?) the same benefit, so I suspect we work for the same place. ). Guess I will know soon enough if that lovely perk is gone.
I have always planned to stay just until 2019 for that 55th bday. Getting close enough that if a layoff happens we will just call it retirement. I am in IT, so that layoff is still a possibility. I have 22 years there so far, so I do have the pension, even though it is frozen at the end of the year.
We LBYM and save so will make the necessary adjustments when the time comes and carry on!

 

[Bamaman]

I would assume that there will be a run on retirements before the end of this year. At least your Megacorp told you what was coming.

My Megacorp in 2008 overreacted and retired essentially everyone over 55. Thankfully I had enough RHSA (retirement health savings account) to cover 6 years of my cost of health insurance for me and a Medicare supplement for my wife.

After all the horror stories I hear about healthcare costs and deductibles, I am truly fortunate. I've still got a great Medicare supplement. It may have been worth putting up with Megacorp's crap all those years after all.

 

[supernova72]

Well that is too bad. I am hanging in there to get to my 55th bday and retire with that benefit. (My company has (had?) the same benefit, so I suspect we work for the same place. ). Guess I will know soon enough if that lovely perk is gone.
I have always planned to stay just until 2019 for that 55th bday. Getting close enough that if a layoff happens we will just call it retirement. I am in IT, so that layoff is still a possibility. I have 22 years there so far, so I do have the pension, even though it is frozen at the end of the year.
We LBYM and save so will make the necessary adjustments when the time comes and carry on!

We might work at the same place actually. I work in IT as well. We've had two rounds of VLO's that started in May of 2013. That CIO has moved on and now TC is our CIO. I work in Bellevue WA.

That should narrow it down. Ha!

 

[eytonxav]

Sounds like your mega-corp was slow to get the message from the other mega-corps about jumping on the cut medical benefits bandwagon that started 15-20 years ago. Your lucky!

 

[HBD2019]

Yes, that narrowed it down all right! I am at the same campus.

 

[marinauser]

The real question for me is what guarantee is there that the medical benefits will not change for retirees at some point in the future any way? A number of retirees have over the years found out that their "medical benefits" were not guaranteed and changed or were eliminated during retirement.

 

[emerytura]

In most cases there is no guarantee.

http://www.dol.gov/ebsa/publications/retiree_health_benefits.html

 

[Sue J]

When DH retired in 2010 we knew that medical benefits were not guaranteed, but had been offered for many years, with yearly increases, of course. We had 3 choices in coverage levels and subsidies for both the retiree and the spouse.

For 2013 they dropped the 2 lower cost choices and everyone had to be on the same very expensive plan that had "platinum" level benefits. Also, spouses under 55 had no subsidy, but could still have coverage at the full cost.

Then they decided to not subsidize spouses between 55 and 65 and in incremental steps over 3 years are eliminating spousal subsidies.

Starting in 2014 we left the retiree plan (can return later and we will when DH is 65 because he will get a subsidy toward a Medicare Supplemental Plan) and bought insurance on the ACA exchange.

I keep up with the news from his retirement system and one of the new discussions concerns reducing the benefits for that "platinum level" plan that is the only one being offered.

The plan benefits are so high (along with a very high cost) that the retirement system is looking at being charged the "Cadillac tax" in 2018 that would cost them millions in excise tax.

They are adjusting the benefits (and therefore the cost) downward to stay under the threshold for the tax and also working on an exemption from the excise tax for retiree plans.

Here's a link to the post and comments from the retiree system -
http://perspective.opers.org/healthcare/opers-delegation-backs-exemption-from-excise-tax/#more-2298

In there it mentions the threshold for the Cadillac tax on a plan cost of $10,200/year which is $850/mo. The plan cost for 2016 is $969/mo per person with the retiree getting a hefty subsidy based on years of service and a spouse getting a much smaller (and reduced 1/3 from last year) subsidy.

 

[Texas Proud]

When DH retired in 2010 we knew that medical benefits were not guaranteed, but had been offered for many years, with yearly increases, of course. We had 3 choices in coverage levels and subsidies for both the retiree and the spouse.

For 2013 they dropped the 2 lower cost choices and everyone had to be on the same very expensive plan that had "platinum" level benefits. Also, spouses under 55 had no subsidy, but could still have coverage at the full cost.

Then they decided to not subsidize spouses between 55 and 65 and in incremental steps over 3 years are eliminating spousal subsidies.

Starting in 2014 we left the retiree plan (can return later and we will when DH is 65 because he will get a subsidy toward a Medicare Supplemental Plan) and bought insurance on the ACA exchange.

I keep up with the news from his retirement system and one of the new discussions concerns reducing the benefits for that "platinum level" plan that is the only one being offered.

The plan benefits are so high (along with a very high cost) that the retirement system is looking at being charged the "Cadillac tax" in 2018 that would cost them millions in excise tax.

They are adjusting the benefits (and therefore the cost) downward to stay under the threshold for the tax and also working on an exemption from the excise tax for retiree plans.

Here's a link to the post and comments from the retiree system -
OPERS delegation backs exemption from excise tax | PERSpective

In there it mentions the threshold for the Cadillac tax on a plan cost of $10,200/year which is $850/mo. The plan cost for 2016 is $969/mo per person with the retiree getting a hefty subsidy based on years of service and a spouse getting a much smaller (and reduced 1/3 from last year) subsidy.

I thought that the Cadillac tax was only if the company was paying over the threshold... if the employee was paying then no tax...

So as long as the company does not pay, everything is OK...

But, I could be wrong...

 

[Sue J]

The retirement system does pay most of the cost for the retirees. For 2016 DH would pay $100 and the retirement system would pay $869. By 2018 he will be paying more, they are in a transition phase for a few years.

His subsidy is less than most of the other retirees, he retired at 55 with 26.67 years of service.

We are both using an Obamacare HDHP plan for 2015 because if he takes the retiree plan I lose a large portion of my subsidy - same income but only one of us buying insurance.

 

[bclover]

The real question for me is what guarantee is there that the medical benefits will not change for retirees at some point in the future any way? A number of retirees have over the years found out that their "medical benefits" were not guaranteed and changed or were eliminated during retirement.

None what soever. My big megacorporation just ended retiree medical benefits as on january 2015. those with 20 years or more are grandfathered in at reduced benefits.

Those with 20 year or less are SOL

 

[zedd]

Super,

I took the VLO package with your megacorp two years and never looked back. I wasn't eligible for the retirement medical.

Actually that's not true. About a year ago same said megacorp offered me a pension buyout option that would have been a sweet deal for me. I accepted the offer, then they later retracted it.

So is the retirement medical benefit guaranteed? Don't count on it.

 

[ripper1]

Thank you. This is a reality check indeed on the cost side.

Huh...Big Deal.....Try 1400 a month for me and wife from City of Chicago Retiree Health Care. Yet the media continues to demonize those hated public employees.

 

[ripper1]

In your situation I would retire before the end of the year. We were government employees & retiree insurance costs way more then when you are active. We pay $900/month.

Got you beat. 1400/month for City of Chicago retiree + spouse.