ALCOA Retirees Embrace Insurance Shift

By Oravecz, John D | Tribune-Review/Pittsburgh Tribune-Review, October 3, 2014 | Go to article overview

ALCOA Retirees Embrace Insurance Shift


Oravecz, John D, Tribune-Review/Pittsburgh Tribune-Review


Alcoa Inc.'s decision to send its white-collar retirees to a private exchange to shop for health insurance didn't surprise some of them.

The company held meetings for retirees Wednesday and Thursday in Green Tree to explain the changes, which are part of a growing trend among companies looking to reduce benefit costs.

Health insurance premiums for Alcoa Inc.'s white-collar retirees have risen sharply in recent years, prompting many to jettison the company plan and use the money to buy cheaper coverage on the open market, several retirees said.

"They were steering us in this direction in the last couple of years," said Jay Zelezniak, 66, of Level Green, a former security manager who retired five years ago after 33 years. He kept the Alcoa plan but said he knew others who took the money to look for cheaper alternatives.

Zelezniak was among about 300 retirees who packed a morning session Thursday at which the changes were explained with the aid of slide shows by representatives from Alcoa and a company that operates a private insurance exchange where retirees will shop for coverage.

Instead of a company-administered plan, Alcoa will give its retirees a set amount of money based on their years of employment at the aluminium-maker to buy coverage through OneExchange, an insurance marketplace operated by benefits consulting firm Towers Watson.

"I think that what they are offering is going to be better for me, but I'll find out for sure on Oct. 13," Zelezniak said.

That's when he scheduled an appointment to talk to benefit advisers from OneExchange.

Retirees said it appears plans on the exchange will offer the same or less expensive premiums than they paid under Alcoa's retiree plan. And coverages appear similar or better. Especially attractive, retirees said, is the opportunity to talk to licensed benefit advisers who will help them make informed decisions on which plan to choose from major insurers.

Alcoa joins the ranks of large companies shifting more responsibility for insurance coverage to employees and retirees. Retirees said they were told their numbers are shrinking, so the move to an exchange will spread costs over a wider pool of insured retirees, lowering costs.

Alcoa spokeswoman Melissa Lelii, reached by phone, declined to say how many retirees are affected by the changes or supply other details, such as how much money the company will give retirees to shop for coverage. "Based on our analysis, they will see a greater benefit of lower overall costs with the exchange options than with their current Alcoa plan," she said. …

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