AT&T retiree health insurance plans will be cancelled for 2015 and later. What are your options? How will you pay for your coverage? Are you required to use Aon? Should you go outside the Aon “umbrella”?
Big companies are dropping retiree health insurance plans faster than a hot potato and AT&T retiree’s are no different. You join the ranks of Alcoa, PepsiCo, IBM, Fannie Mae, Savannah River Project and many more.
So where do you go from here? Should you buy one of the suggested plans from Aon? Or should you look for coverage in the open market?
Table of Contents
Aon and the AT&T retiree
Aon is a large employee benefit conglomerate that has secured a contract with AT&T to provide “counseling” services to retirees. You have probably received your notice from AT&T and may have had a call from a counselor that want’s to schedule a phone interview.
Retiree’s that contacted us for advice have indicated their counselor seems to have very little understanding of how Medicare works and what your options. The advice seems to be little more than reading from a prepared script on a computer screen.
One recent comment from a forum ……..
I am an AT&T retiree. My wife and I have been exposed to Aon’s “customer service,” which is a joke, and not a funny one. We are SO grateful to have found this forum and at least feel that we have better options than Aon offers. Thanks to all for the great information — we are truly grateful.
Aon call center reps earn around $18/hour plus a bonus for each application submitted. They are paid to push product, nothing more. Their training is specific but they would not even qualify as a “30 day wonder”.
The Aon website is of limited value, even if you know what you are doing. This is not necessarily my opinion. I am merely repeating what AT&T retiree’s have told me. Product offerings are limited, and often pricey.
Shop and compare GA Medigap Quotes
HRA money
AT&T has agreed to deposit $2700 into the retiree’s HRA account + an additional $1500 for a qualified spouse of the retiree.
The money comes with strings attached.
In order to receive the funds, the AT&T retiree (or their spouse) must purchase at least one plan from Aon. You may elect for a Medicare Advantage plan, Medicare supplement plan, or Part D prescription drug plan.
If you don’t like the Medigap options you are free to purchase your coverage outside of Aon by using an agent of your choice or going direct to a carrier. If you purchase outside of Aon the premium payment can be reimbursed by the HRA administrator.
We have found that plans promoted by Aon reps may not be in the best interest of the retiree. Whether this is intentional or simply due to a lack of understanding about how Medicare works is subject to debate.
Every AT&T retiree we have talked with have said the number of plans listed on the site is very limited and mostly seem to be higher priced offerings.
If you are looking for coverage outside of the Aon offerings, in Georgia you will find
- As many as 20 different Medicare Advantage plans (depending on your zip and county)
- Over 30 different drug plans (based on your county and zip)
- Over 30 Medigap carriers offering over 170 different plans state wide
Navigating this maze of 200+ choices can be frustrating. Finding an agent that specializes in Medicare options and understands the AT&T retiree choices can be difficult.
Shameless plug follows ……….
Bob Vineyard at Georgia Medicare Plans has 40 years experience in the health insurance field. As an independent broker, he is able to offer you multiple solutions and answer all your questions. Call or email. You have questions, we have answers. You can also begin your shopping with our Medigap quote engine. Compare plans and rates side by side. Click for your instant quote.
UPDATE: Discussions with AT&T retirees shows an alarming trend. When retirees compare rates for Medigap plan “X” with the EXACT SAME PLAN outside of the exchange the non-Aon rates are higher than open market rates.
Also, retirees are being told by the Aon reps they must buy ALL coverage through Aon to receive the HRA funds. If you are told that, ask to speak to a manager. The AT&T FAQ clearly states you must buy either Medicare Advantage, Medigap or drug plan.
Medicare Advantage
Medicare Advantage plans are essentially Medicare where your claims and benefits are managed by an insurance carrier instead of original Medicare.
Original Medicare does not have networks. You are free to use any doctor, lab or hospital that accepts Medicare assignment. That covers 96% of medical providers in the U.S.
Medicare Advantage is a managed care system. Some plans have very limited networks and severe penalties for using a non-par provider. These are HMO plans.
The next most common option is the PPO where you have a broader choice of physicians but is typically a much smaller number than the entire population of doctors in your area. Doctors can be dropped from the plan at any time.
Vera Brown of Augusta is still upset about a letter she received from her health insurer.
UnitedHealthcare wrote to notify her that it was dropping Dr. Sean Lynch, her physician, from its Medicare Advantage doctor network.
“I’ve been with Dr. Lynch for years,’’ says Brown, 67, a registered nurse. “He treats me like his mother.”
A new wave of physicians are being cut from UnitedHealth Group’s Medicare Advantage network, continuing a trend that started last year and has reportedly already shaved more than 30,000 physicians from the same network.
UnitedHealth started notifying physicians who are being terminated from the network over the last few weeks, according to state medical associations in states such as Alabama, Georgia, Massachusetts, North Carolina and Tennessee.
When you choose a Medicare Advantage plan you must review your plan every year, usually during open enrollment. Premiums will change from year to year, benefit changes include higher deductible’s, copay’s and out of pocket limits (OOP).
Five years ago the average OOP limit for Advantage plans was $2900. Now it is $5400.
Even though your premiums may not increase your cost sharing will go up every year. Too many retiree’s make the mistake of focusing on the monthly premium and fail to account for the total cost of the plan which includes your deductibles, copay’s and coinsurance.
Your OOP limit only applies to in network APPROVED claims and does not include your prescription drug expenditures.
Medicare supplement coverage
Medicare supplement plans, also called Medigap insurance, is designed to work exclusively with original Medicare.
Any doctor, lab or hospital that participates in Medicare will also accept your Medigap coverage. They don’t care if you have a Medigap plan or the name of the carrier.
Contrast that with Medicare Advantage where you pick your doctor from a list of approved providers. If the doctor of your choice is not on the plan you can expect to pay out of pocket up to the Medicare approved amount.
Medicare supplement plans are standardized. The benefit structure is designed by Medicare. Page 9 of “Choosing a Medigap Policy” has this to say.
Every Medigap policy must follow federal and state laws designed to
protect you, and the policy must be clearly identified as “Medicare
Supplement Insurance.” Medigap insurance companies in most
states can only sell you a “standardized” Medigap policy identified by
letters A through N. Each standardized Medigap policy must offer
the same basic benefits, no matter which insurance company sells it.
Cost is usually the only difference between Medigap policies with
the same letter sold by different insurance companies.
All Medigap plans with the same letter have exactly the same benefits. The only difference is the premium.
When you pay more you don’t get more, you simply paid too much.
The most popular plan if Medigap plan F followed by plan G and N.
Consider plans that deliver the most value and have a stable rate history. We suggest limiting your choices to carriers that have at least a 5 year track record of writing Medigap plans in your state.
Caveats and considerations
The HRA monies offered to AT&T retiree’s can change at any time. AT&T made a business decision to drop the current retiree medical plan in favor of the retiree HRA option. Only AT&T can say if they will continue this practice or not. Future deposits to your HRA are not guaranteed.
You must follow the rules in order to receive the HRA monies, but you are not required to buy all your coverage from Aon.
Outside of Aon you have more choices, but with over 200 options you may find it overwhelming.
Consider contacting an agent that is familiar with plans in your area. A knowledgeable agent can save you a lot of time, money and frustration. My clients tell me they learn more in a 15 minute phone conversation than they have learned through weeks of searching on the internet.
Most agents will offer advice at no charge. They have access to the same plans you would have if you went direct to the carriers. Premium rates are exactly the same as you would be charged by the carrier. Agent service fees are “hard wired” into the pricing of each plan so you will not pay more for using an agent.
Offering advice, helping you find a plan that fits your needs and budget is how we earn our living. This is not a hobby. This is our livelihood.
That’s me on the right. >>>>
If you feel that a Medicare Advantage plan is best for you and you want to keep the HRA money, you must buy from Aon. Buying an Advantage plan from an agent means you forfeit the HRA deposit.
Advantage plans come with one additional caveat.
If you start out with an Advantage plan and later decide you should have picked a Medigap plan you may be able to qualify now, but not in the future.
However you can buy a Medicare supplement plan through an agent and in most cases, the carrier will pay a service fee to the agent for assisting you.
Some AT&T retiree’s may be able to qualify medically for a supplement plan. If this is the case with you, there are more plans to pick from at more favorable pricing.
If you are exercising your right to a Medigap plan under the Medicare guaranteed issue provisions you plan choices are limited, premiums are often higher and your agent most likely will not be compensated for these plans.
As an AT&T retiree you have a lot of factors to consider in making your decision. Choose wisely. Are you ready to shop and compare?
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