Over the last few years AT&T has made some significant changes to their medical coverage options for retirees. This has included requiring retirees 65 and older to transition to Medicare and the recommendation of using AON Hewitt Healthcare Exchange for Medicare supplement coverage. Also, there have been changes regarding Health Reimbursement Accounts (HRA) and the amounts AT&T will fund them with. You can read our 2014 post here and 2015 post here. It is now that time of year when AT&T is communicating changes for the upcoming enrollment year and Sound Financial is here to assist once again. We want to help lay out the changes and how it can impact you as an AT&T retiree. Let’s take a look.
A significant change for this coming year is AT&T’s requirement that ALL “Medicare-eligible” retirees and dependents be moved to Medicare in order to continue to receive AT&T benefits. Of course those that are 65 and older and automatically transitioned to Medicare as they normally would, but also anyone that has been disabled for 2 or more years. Meaning if you or a dependent were no longer working due to a work injury and have been disabled for 2 or more years, that person would be eligible for Medicare and therefore required to transition to Medicare.
AT&T is also continuing to move retirees to its AON Hewitt Healthcare Exchange. The use of AON Hewitt will be required to receive Medicare supplement coverage as an AT&T benefit with one exception. If someone is 65 or older and retires under this current labor contract, they do NOT have to sign up with AON Hewitt for Medicare supplemental coverage. They can continue to pay insurance rates as though they were active employees, but after August 2019 (the end of the current labor contract) they will be required to enroll with AON Hewitt. If a retiree or dependent does not meet this parameter, they must use AON Hewitt for their Medicare supplemental coverage.
In the past, if a retiree has used AON Hewitt, the company would contribute $2,700 for the retiree to a Health Reimbursement Account (HRA), and $1,500 for a dependent who also receives their supplemental insurance from AON. The money in that HRA can be used to help pay for insurance costs and medical costs that are not covered by insurance. This is a continuation of benefits going back to 2015. It is believed these HRA contribution amounts will be unchanged for this coming year, but you must speak with your Benefits Coordinator to verify your amount.
The enrollment period for the 2017 benefit year will begin on October 10th and last until December 7th, 2016. This can all seem very confusing to someone that hasn’t had to deal with HRA credits, the Exchange, or Medicare before. We would encourage you to contact your financial advisor at Sound Financial to see how this may impact your retirement planning. While we are not insurance experts, our experience helping AT&T retirees navigate retirement may be applicable in helping you with this important decision.
Investment Advisory Services offered through Sound Financial Strategies Group, Inc. (“SFSG”), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies.
Neither SFSG nor APW Capital are endorsed by, retained by, or affiliated with AT&T. APW Capital does not offer tax or legal advice.
Posted on Thu, October 13, 2016
by Sound Financial