Different coverage for retirees

[Guest Diana Prewitt]

We are a self-funded medical and dental plan, with benefits for both active and retired employees. We are very interested in a PPO arrangement. How would this effect retired employees on Medicare? Could we institue a PPO for active employees only?

[KIP KRAUS]

Diana

If you have current retirees that may be adversely affected by switching their coverage to a PPO, I wouldn't advise changing such retiree's coverage. On the other hand, there is no reason why you can't amend your plan to a PPO arrangement for active employees and future retirees.

My answer is based on the assumption that you do not have a bargaining agreement which would restrict your options?

[Guest Diana Prewitt]

Thanks for your response. We do not have a bargaining agreement. Many of our retirees are quite elderly and for some of them a change of this magnitude would be extremely difficult.

[Guest jlcowden]

Diana,

You may find that a passive PPO works for retirees. Additionally depending on retiree locations placing them in a PPO could be feasible...barring specific promises not to change retiree coverage, I see no reason why you are obligated to continue as is forever.

quote:

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Originally posted by Diana Prewitt:

We are a self-funded medical and dental plan, with benefits for both active and retired employees. We are very interested in a PPO arrangement. How would this effect retired employees on Medicare? Could we institue a PPO for active employees only?

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jlcowden

[This message has been edited by jlcowden (edited 03-31-2000).]

[Guest nac]

We've discussed the possibility of a passive or active PPO for our 1200 retirees as well; what we've found is that system constraints and the fact that Medicare reimbursement rates are frequently lower than PPO discounts may make this more difficult than it's worth.

Have you considered - moving forward for new over-65 retirees - a Medicare carve-out plan? In effect, you'd be pretty much only covering Rx, which is still a significant portion of their medical expense.