Help Retirees Manage Health Coverage

By Zielinski, Dave | HRMagazine, May 2013 | Go to article overview

Help Retirees Manage Health Coverage


Zielinski, Dave, HRMagazine


Web-based tools allow retirees to compare plans and costs.

When Julia Nicholson moved the health insurance enrollment for her organization's retired employees from paper to an online process, the goal wasn't just to eliminate the headaches and associated costs of managing 60,000 paper forms and documents.

Nicholson, director of health and welfare services for United Food and Commercial Workers International Union & Employers Trust LLC in Walnut Creek, Calif., wanted to make it easier for retirees-former grocery store employees-to use decision support tools embedded in software from Benefitfocus of Charleston, S.C. The technology, which is part of benefits-related services negotiated in a collective bargaining agreement, assists retirees and their dependents in making critical health care coverage decisions.

Nicholson was impressed by how quickly the union's retiree members adapted to the Web-based enrollment process. "We offered a telephone enrollment option as an alternative but were surprised at the numbers who used the online option," she says.

The union had a 98 percent completion rate during its 15-day enrollment period. Retirees enrolled on the organization's website, using educational videos and useful links to guide them through health care coverage decisions.

A "Plan Shopping" app, for example, allows users to evaluate health plans side by side, with calculations to determine premiums or projected out-of-pocket costs. Out-of-pocket costs can weigh heavily in the selection of plans such as Medicare Advantage-the "Part C" plans offered by private companies that contract with Medicare-where there are often reduced or no additional premiums. Retirees use the app to help determine if they'll receive sufficient prescription drug coverage or other ancillary medical services under those plans.

Such online tools can also show retirees and near-retirees what their plan usage was in a preceding year, then project how that usage might affect outof- pocket costs based on different plans available in the next enrollment period.

The cloud-based software also features decision support "avatars" that guide retirees through benefits selection. At decision points, for example, an avatar might say, "Here is what you want to do next" or might provide other guidance.

Another tool enables users to compare prices for prescription drugs. "That helps our retirees identify lower-cost drugs if they are indifferent to using a generic brand," Nicholson says.

Retirees are also able to see their current benefits election and claims information, and they can change their contact information, search for health providers and more. "The platform allows us to do most of the things we would want to do if we could sit down and talk with each of our members individually, which, of course, is time- and cost-prohibitive," Nicholson says.

Online tools have made retirees better educated about, and more engaged in, their health care options, she adds.

Assessing Options

With more employees turning 65 every day, and fewer organizations offering retirees medical insurance, HR benefits administrators are looking for help in transitioning active employees to individual health insurance plans. For employers that subsidize retiree health care insurance, decision support tools for retirees are generally part of a broader array of benefits services and are not stand-alone products.

The stakes are high for retirees making health insurance coverage decisions, given the rising costs of medical care and longer life spans. A 65-year-old couple with supplemental Medicare coverage would need $227,000 to have a 75 percent chance of covering their health insurance premiums for their lifetime and other out-of-pocket medical costs if they retired after 2012, according to a study from the Employee Benefit Research Institute. That sum rises for those with above-average prescription drug needs.

While many organizations are looking to reduce or eliminate retiree medical expenses, most don't want to step back completely, says Christi Wise, a senior vice president with Fidelity Investments in Boston. …

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