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towerswatson.com © 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 1

Helping You Transition to Supplemental Medicare Insurance

Retiree Readiness

© 2013 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

A Bit of Context

• TCU changed the way it provides medical benefits

to Medicare-primary retirees and their

Medicare-primary dependents.

• Retiree’s medical benefits are managed through a

Health Reimbursement Arrangement account

(HRA).

2


What we’ll cover today

• Why this approach?

• How this affects you

• Medicare 101

• Introducing OneExchange

• Going forward

• Questions & answers

3


Why This Approach?• Provides Medicare-eligible retirees with:

Greater flexibility in how to use health care dollars A broader range of plan options

• Enables TCU to continue supporting retirees during a time of uncertainty surrounding the rising cost of medical insurance and services

• Enables TCU to predict and budget for health care costs more accurately

4


How This Affects Medicare Eligible Retirees

• Medical premiums and out-of-pocket costs will vary depending on the coverage you choose.

• You will work with OneExchange to enroll in a plan that meets your medical and Rx needs.

• TCU will establish your Health Reimbursement Account. This account will be administered by OneExchange

• OneExchange Advisors will help you understand the costs associated with your coverage – premiums, co-payments, deductibles and all other costs.

What you pay

How to enroll

Your support


Medicare 101

• Everything you wanted to know about Medicare, but were afraid to ask!


CMS – Center for Medicare & Medicaid Services

HHS agency that governs everything Medicare

1-800-MEDICARE


Original Medicare:• A Health insurance program for

– People 65 years of age and older

– Some people with disabilities

– People with End Stage Renal Disease (ESRD)

• Administered by CMS and the State Department of Insurance

• Enrollment handled by Social Security Administration or Railroad Retirement Board

Key TermsMedicare Part A = Hospital Coverage – administered by CMSMedicare Part B = Medical Coverage – administered by CMSMedicare Part C = Medicare Advantage Plans – private plans – group or individual marketMedicare Part D = Prescription Drug Coverage – private plans – group or individual marketMedicare Supplement (Medigap) – private plans – group or individual market

8


Original Medicare: Part A (Hospital)

Premiums:

• Most people do not pay a monthly Part A premium because they or a spouse have 40 or more quarters of Medicare-covered employment.– $254.00 for 30-39 quarters of Medicare-covered employment.

– $461.00 for people who have less than 30 quarters of Medicare employment.

Foreign citizens and Americans who worked abroad

Coverage:

• Medicare Part A covers:

– Hospital Stays

– Skilled Nursing Facility (SNF)

– Home Health Care

– Hospice Care

– Pints of blood received at a hospital or skilled nursing facility during a covered stay

9


Original Medicare: Part B (Medical)

Initial Enrollment Period:

o When turning 65. o 3 months before, the month of, and three months after 65 th B-Day. (7 month window)

Coverage:• Doctors’ services (physician office and some hospital

settings)• Limited Chiropractic Services• Outpatient Services:• Diagnostic tests- clinical Lab

o (x-ray, MRI, CAT, EKT, nutritional therapy, etc…)

• Other medical serviceso Durable medical equipment (DME)- prosthetic, wheelchair etc. o Diabetic Supplieso Ambulance service

10


A person that is eligible for Medicare but opts out of Part B may be subject to a 10% per year Part B penalty

• Penalty is waived if beneficiary has coverage through a group policy based on active employment

Medicare Part B - Late Enrollment Penalty


For employers with 20 or more employees, group coverage is primary for Medicare beneficiaries who are still active, and Medicare is secondary. Therefore, active beneficiaries don’t have to enroll in Part B and will not be penalized when they decide to retire. When they decide to retire, beneficiaries should enroll in Part B three months prior. This will insure that they can enroll in a Medicare Supplement plan and have it effective as soon as their group coverage ends.

Medicare Eligibility & Active Employment

• If active and covered under the group health plan, employee does not enroll in Medicare Part B or select a Medicare supplemental plan(s) until they retire or lose coverage.

12


Post – 65 Coverage Options

Primary Coverage

Medicare A & B

Additional Coverage (your choice)

Medicare Advantage with Prescription Drug (MAPD)

OR Medigap + Prescription Drug


Part D: What is Medicare Part D?

• Medicare Part D is optional prescription drug coverage for everyone with Medicare Part A and/or B

• PDP’s are run by private insurance companies approved by Medicare (Like MA plans)

• If beneficiaries decline to enroll in a Medicare drug plan when they are first eligible, they may be penalized. (1% of national average per month)

• Beneficiaries sign up when they first become eligible for Medicare, or during the AEP

14


Aging Into Medicare – Turning 65

All Medicare beneficiaries receive a Medicare card when they become eligible. This will contain their full name, Medicare Claim number and the dates your Medicare Part A and B became effective. Beneficiaries may use this card with any medical provider in the country that accepts Medicare.

A beneficiary is automatically enrolled in Part B when enrolled in Medicare Part A. If you do not want Part B, you must opt out of that coverage.

This card is generally sent three months before turning age 65.

Must Have Original Medicare A & B to be Able to Consider Any Supplemental Medicare Medical Insurance [either Advantage or Gap]


Helping You Prepare For Your Upcoming Medicare Enrollment

OneExchange

TOWERS WATSON


Who We Are Transitions Can Be A Good Thing! OneExchange – For Your Benefit A Deeper Dive – Benefit Advisors,

Private Exchange, Optimize Savings, Health Reimbursement for You

Next Steps Questions & Answers

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Transitioning from Employee to Retiree Healthcare Benefits

• OneExchange was chosen after an extensive evaluation of choices

• OneExchange will help you with total care in your transition over to more-effective individual Medicare health insurance

• The private exchange offers greater choice and flexibility; many affordable choices exist and in many cases provide more value at a lower cost than an employer group plan

• Ongoing support – at no cost to you

18

Access to retiree health benefits for Medicare-eligible retirees and their Medicare-eligible dependents is

provided through OneExchange

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About OneExchange Retiree

Towers Watson

over100 years experience

First and Largest private Medicare Exchange

Personalized options with plans from a nationwide network

of carriers

More Choice, More Flexibility – Better Value

Licensed advisor provides guidance and

ongoing advocacy

Over 1-millionretirees served across

540+ employers

Our

10th annualenrollment season

Founded in 2004

No fees for our service


Why OneExchange?White-Glove Service

Consultative Process

Simplified Selection

LifetimeAdvocacy

EffortlessEnrollment

Selection Process:Your Benefit Advisor

will provide the guidance you need to easily understand your Medicare options

Enrollment Process:100% paperless,

telephonic enrollment

Secure and efficient

Consultative Process:Your Benefit

Advisor will determine coverage needs and thoroughly research your options

Advocacy:Specialized and

focused; trained in insurance, Medicare and issue resolution

towerswatson.com20

towerswatson.com


Our Service Centers

Salt Lake City, UT

Dallas, TX

Operating hours: Monday – Friday, 7:00 a.m. until 8:00 p.m. Central Time

100% Domestic WorkforceNo Outsourcing!


All Medicare Plan Types

Plans and Partners

Multiple plans available to you from national/regional carriers

Prescription Drug(Part D)

Medicare Advantage Medicare Supplement(Medigap)

A few examples of the carriers on our Medicare exchange:

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Your Experience

Announcement & Education

Evaluation & Enrollment

Ongoing Communications

& Advocacy


EducationEnrollment Guide

Prepare for your enrollment consultation

• Review Medicare basics

TOLL FREE

1-888-429-8490

medicare.oneExchange.com/TCU

24


Decision Support Tools

• Help Me Choose

• Prescription Profiler

medicare.oneExchange.com/TCU

24/7 access to your information

25


Benefit Advisors

Licensed / Certified / Appointed

OneExchange University™

Average age 43

Objective & unbiased

100% domestic workforceHours of

Operation

Monday – Friday 7 am – 8 pm CT


Enrollment Process

Benefit Advisors can discuss coverage options with anyone

Telephonic enrollment – 2 part process

100% of calls are recorded


Enrollment Confirmation NoticeFeatures: Sent once a participant has enrolled into a plan

Confirms all plan selections and enrollments

• Carrier Name• Plan Name• Confirmation Number• Premium• Coverage Effective Date• Whether or not they have

selected Automatic Reimbursement

What Happens Next• Expectations on Carrier

correspondence, including ID Cards

• Subsidy Packet• Automatic Reimbursement• Direct Deposit


MEDICAREADVANTAGEMEDICARE

ADVANTAGE

OPTION 1: Medicare Advantage Plan with Prescription Drug Coverage (MAPD)*

* Note that Medicare Advantage plans are generally network based plans

29

+ PD


Note: You may need to pay your first premium when you enroll in coverage

PART DPLAN

PART DPLAN

MEDIGAPPLAN

OPTION 2: Medigap Plan + Part D Plan

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MediGap – Lettered Plans


Medicare Prescription Drug Coverage 2015

Catastrophic Coverage

Coverage Gap

Initial Coverage

Deductible

You Pay Full Retail Until Deductible is Met 2015 - $320

You pay copays for your plan coverage for the first $2960 in actual costs of Medications

You pay 45% of Brand Name and 65% of Generics until your out of pocket costs reach $4700; Pharmaceutical contributions will count towards the $4700 True Out Of Pocket costs

You Pay $2.65 for Generics and $6.60 for Brand Name or 5% - whichever is greater

Only 25% reach Donut Hole

Only 4% reach Catastrophic


How This Affects You

• Depends on the plan you choose

• Choose the right level of coverage for you and your spouse individually

What you pay

How you enroll

Your support

• You enroll directly through OneExchange

• You and your Medicare-eligible spouse enroll in separate plans

• OneExchange will be your partner as you make this decision and enroll in plans

• OneExchange will provide ongoing support - at no cost to you

33


Local Plan Slides


Plans Available in Tarrant County

Plan Type Number of Plans Offered

2015Monthly Premium Carriers

Medicare Advantage 17 $0 - $89

Coventry, Humana, AARP, Aetna, Scott

& White, CIGNA Health Spring

Medigap / Medicare Supplement 20 $75 - $339

AARP, Humana, BCBS of TX

Loyal American by CIGNA


21 $16 - $152

AARP, Aetna, CIGNA, Humana Express Scripts,

SilverScript, WellCare, Coventry,

BCBS of TX


Plans Available in Dallas County

Plan Type Number of Plans Offered

2015Monthly Premium Carriers

Medicare Advantage 20 $0 - $166

Coventry, Humana, AARP, Aetna, Scott

& White, CIGNA Health Spring

Medigap / Medicare Supplement 20 $75 - $339

AARP, Humana, BCBS of TX

Loyal American by CIGNA


21 $16 - $152

AARP, Aetna, CIGNA, Humana Express Scripts,

SilverScript, WellCare, Coventry,

BCBS of TX


Medicare Advantage Plan

Benefit CostPremium $30

Network PPO

Deductible In Net: Some Services Out Net: $1000

Doctor Copay In Net: $0 Out Net: $40

Specialist Copay In Net: $40 Out Net: $60

Hospital In Net: $400 copay per stayOut Net: 30% per cost stay

Emergency Room $65 unless admitted to the hospital

Deductible $0

Rx $0/ $4/ $40/ $80/ 33% 30-day supply

Mail Order $0/ $12/ $120/ $240/ 33% 90-day supply37

2015


Medigap Plan F + PDP (75 year old male)

Benefit CostPremium $241 ($229 Medical + $21 PDP)

Network Any doctor who accepts Medicare

Deductible $0

Doctor Copay $0

Specialist Copay $0

Hospital $0

Emergency Room $0

Deductible $0

Rx $8/ $8/ $37/ 47%/ 33% 30 day supply

Mail Order $20/ $20/ $92.50/ 47% 90 day supply

38

2015


Health Reimbursement Arrangement

(HRA)


What Is An HRA?• Tax-free account used to reimburse you for eligible health

care expenses – you pay first and then get reimbursed

• If you are eligible, your former employer will make an annual contribution to a Health Reimbursement Account (HRA)

• You may use HRA funds to reimburse yourself for eligible medical expenses which include premiums that you pay coverage for (including Medicare Part B) and certain out-of-pocket expenses

• Your HRA funds will be available on the first of the month of your retirement, prorated for the year. On Jan 1st of the next year, you receive the full annual amount.

40


Health Reimbursement Arrangement

If you are eligible, reimbursements are

made up to the amount available

in your HRA


Health Reimbursement Arrangement Reimbursement Options

1.

Automatic

Reimbursement[including recurring claims]

2.

Manual Reimbursement

If you are eligible, reimbursements are

made up to the amount available

in your HRA


• Service offered by OneExchange

• Available on most plans

• Works for premium reimbursement only

• No claim form is required

• Can take 2-3 billing cycles to initiate

• If you need your reimbursement sooner, simply file a paper claim. The form and instructions will be provided in your Funding and Reimbursement Guide

Auto-Reimbursement (AR)


Next Steps


What You Need To Do: Action Required!• You MUST enroll in Medicare Part B if not

already enrolled – contact the SSA

• Contact OneExchange at 1-888-429-8490

• Make a first contact call now and schedule an enrollment appointment

• Enroll in your new coverage• Call us during your scheduled appointment time

• You are guaranteed coverage 45


Personal Guidance: Ongoing Advocacy

Ongoing Advocacy:

Navigation Enrollment Claim issues Denied policies Affordability concerns Prescription Late enrollment HRA Annual plan review


Why OneExchange Retiree

People Objective and personal touch through stringent training processes and CMS compliance criteria

Size and Strength

300 employers and 800,000 retirees being served

Technology Most automated connections, across 90 carrier partners

Satisfaction99% client retention rateAverage retiree satisfaction 9.2/10.0

Experience First and largest Medicare Exchange; private

Relationship As life happens, we are here for you

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