Local General Electric retirees were informed last week that their current health coverage will expire at the end of the year and they must now shop for a new plan on a private health exchange.
For now, the change in coverage affects only Medicare-eligible, former salaried GE employees and their spouses. Starting in January, GE will provide them with access to OneExchange, a private health care exchange administered by New York City firm Towers Watson, the world’s largest employee-benefits consulting firm. GE will help pay for some expenses.
“The change in our program is consistent with trends among large companies,” said Seth Martin, GE’s director of financial communications, in an email. “It allows GE to offer greater choice in coverage while striking a balance among our obligations to employees, retirees and shareowners.”
He declined to divulge how much the move, which affects about 65,000 retirees and spouses, is expected to cost or save GE. Former GE labor negotiator Dennis Rocheleau told Bloomberg last fall that GE would save millions by dropping its coverage for retirees.
Plans purchased through the private exchange will replace GE’s current company-subsidized, post-65 retiree health plans (like its prescription drug plan) and retiree pay-all Medicare supplemental plans. OneExchange will offer more than 1,000 plans from 90 different insurers, including AARP, Aetna, Blue Cross Blue Shield, Humana and UnitedHealthcare.
GE will provide a Retiree Reimbursement Account and Pharmacy Assistance Fund for those who purchase a Medicare supplemental plan through the exchange. Advisers will be available to help retirees select a plan that fits their needs and budget.
Plans and pricing will be announced during the Medicare annual enrollment period, which starts in October.
The cost will depend on where retirees live and the type of coverage they choose. With 40 million retirees purchasing coverage in the individual market, GE expects its retirees should get more coverage options than they have now at a possibly greater value than the current company-sponsored plans.
In the past year, GE has joined companies such as IBM, Time Warner Inc. and UPS in moving retirees to private exchanges. These exchanges are not part of the state or federal health exchanges launched in the wake of the federal Affordable Care Act. Instead, they are privately run marketplaces where Medicare-eligible individuals can shop for individual health care plans. Consulting firm Accenture predicts that by 2018, enrollment on these exchanges could outpace enrollment on public exchanges.
The health care industry doesn’t quite know yet which model is preferable, though the exchange model is generally viewed as a welcome alternative to traditional, one-size-fits-all company plans. But GE retirees who opened their mail last week say they’re worried the exchange is a betrayal by the company they devoted decades of service to.
“I think in some cases it will be catastrophic,” said Claude Dutcher, 67, of Saratoga Springs. “The costs will obviously depend on the individual because everybody is different, but there is a lot of anxiety right now over this. You retire after 36 years and think, ‘I haven’t gotta worry about this,’ and now we’ve gotta worry about this.”
A local union representative says it’s a matter of time before the company tries to negotiate hourly retirees into the private exchange.
“It could be a strikeable issue,” said Brian Sullivan, business agent for the Local 301 Retiree Council, which represents former hourly retirees.
Martin declined to comment on upcoming union negotiations.
Informational meetings on the change in benefits will be held in communities across the country. Locally, meetings will be held Sept. 22, 23 and 24 at the Century House at 997 Route 9 in Latham. Meetings will kick off each day at 8:30 a.m., 11:30 a.m. and 2:30 p.m. and run about 90 minutes. Anyone planning to attend must RSVP at least a day in advance by calling 1-877-925-9109.
Retirees can also access a one-hour, pre-recorded conference call anytime between now and the end of the year by calling 1-844-288-6492. An online video webcast detailing the changes is also available at www.medicare.oneexchange.com/ge.