If you have retired clients who receive a health reimbursement from their employer, you may have thought you can't help them.
After all, they're under the impression that they have to buy all their Medicare insurance from their provided health exchange (such as Aon, OneExchange, or Via Benefits) in order to qualify for their reimbursement. However, that's not true!
Here's the overarching point I want you to know: you can help these clients!
It recently came to my attention that many agents were unaware of this, so I may be making your day.
What Is an Employer Stipend?
Times are changing, and many large companies are moving towards the employer stipend model. This means that the costs of post-65 healthcare are subsidized by your former employer, typically in the form of a stipend (or reimbursement). This is also sometimes referred to as an RHRA, or Retiree Health Reimbursement Arrangement.
These major employers want to be OUT of the responsibility when it comes to health insurance. They're ultimately kicking these retirees to the curb. These companies said they'd offer health insurance in retirement, and this is their way of fulfilling that promise without really having to deal with it.
That stipend can be used for a Medicare Supplement, Medicare Advantage plan, a Part D prescription drug plan, a Dental Vision Hearing plan, and so on.
Companies Who Are Subsidizing Retiree Health Insurance
Just in our central Illinois area, there are some major employers who follow this reimbursement/stipend model:
- State Farm
- Tate & Lyle
- General Electric
According to Kaiser Family Foundation (2015), about 25% of large firms are offering retiree health benefits.
Other major companies across the United States who also follow this model for retired employees include:
- IBM Corp
- Time Warner Inc.
- Ohio Police & Fire
- United Airlines
- Rockwell International
According to Aon Hewitt, nearly two-thirds of employers say they're considering moving their retired employees to an exchange sometime after 2013.
In other words, this is a massive shift, and you're more likely than ever to come across potential clients who are in this employer stipend model.
What Is a Health Insurance Exchange?
The other part of the whole reimbursement deal is that there's a health exchange involved. In general, a health insurance exchange is an online marketplace where you can compare and buy health insurance plans. In this case, we're dealing with retirees and Medicare plan options.
The health exchange company says, "Hey, we'll handle all of the financial liabilities and admin for you if you require your retirees to purchase one of their Medicare products through our exchange."
One of the largest retiree health exchanges is Aon Retiree Health Exchange, which serves over 300,000 individuals and over 100 employers, many of which are on the Fortune 500 list.
There are other major consulting companies as well, such as Mercer Health and Benefits LLC (Mercer Marketplace) and Willis Towers Watson Exchange Solutions (OneExchange). Although OneExchange is changing its d/b/a to Via Benefits Insurance Services.
We have a lot of experience with Aon specifically, so we can explain a bit about how that works.
Our Experience with the Aon Retiree Health Exchange
Let me preface this by saying we've come across health exchanges other than Aon like OneExchange and Via Benefits, and they all fall under the same type of umbrella. For example, Caterpillar goes through Via Benefits while Ameren goes through Aon. Every claim form looks exactly the same. It just has a different name at the top.
So, many of the retirees in our area deal with the Aon Retiree Health Exchange. Essentially, their employer gives them a stipend which is $3,000 per year, and they are required to buy their insurance products through Aon.
However, this is the important part – they only have to buy ONE product from Aon. Many agents that I've spoken to were under the impression they have to buy ALL of their insurance from the health exchange, but they don't.
You can easily verify this by reading the letter provided to the retiree.
Here's the language used in the Aon letter to our local Ameren retirees:
In addition to helping you with the purchase of an individual Medicare and/or prescription drug plan, Aon may also assist you in selecting and enrolling in dental and vision coverage. For eligible retirees and spouses, Ameren will provide you funding through a Retiree Health Reimbursement Account (RHRA) when you enroll and remain enrolled in a Medicare Advantage, Medicare Supplement, and/or Prescription Drug Plan through Aon.
The key phrase is "and/or."
So, if you thought you had no chance of helping these retirees, think again!
What We Recommend For Retirees on a Health Exchange
My process is to have my client sign up for their Part D drug plan through the health exchange, and we work together to complete the rest, whether that's a Medicare Supplement or an MA plan.
I still run the drug comparison for them so that they can call Aon and tell them exactly which plan they want. That ensures they're not going to overpay for the Part D plan. I write the rest of what they need myself.
This satisfies the requirement to purchase something from Aon, which allows them to stay eligible for that reimbursement from their employer.
Why an Agent Is Better than the Exchange
Now, I realize you may be met with some suspicion here. Will your clients think you're just trying to earn more commission off of them? Is this really in their best interest?
But let me say this: they're going to get a much better price going to you than they will their health exchange – not to mention the superior service you can offer.
Better Medicare Supplement Options From You
One of the big things is that the Aon Retiree Health Exchange doesn't offer all the Medicare Supplement carriers we do. We have carriers with much lower premiums than what the client could choose through Aon.
Here's a real-life example – Aon only offers Med Supp plans from 3 carriers in our county. THREE carriers! These also happen to be some of the most expensive Med Supp carriers here.
By just running a quick comparison, I could save my client $63 per month on a G if they came to me instead of Aon.
You can check which plans Aon offers in your county if you're in a similar situation: https://retiree.aon.com/find-plans/medicare-supplement-plans.
Help With the Reimbursement Claim Forms
Another big deal is that you can help your clients with the claim forms, which is what overwhelms a lot of people.
They say, "I tried to fill it out and sent it in, and they denied me!" And this happens all the time.
You can send in a husband and a wife with identical information and they may deny one and approve the other. Sometimes it depends on who is picking it up on the other end of the fax machine. That's a very common thing. So, you may have to resubmit the forms a couple times, but that's eliminating the frustration for those clients.
If you're thinking there's NO way you'd be able to take the time to submit forms on behalf of your client, this article talks about how to make your first hire: How to Manage Growth as a One-Person Insurance Agency
There are a few best practices when helping your clients with the claim forms.
1. The reoccurring reimbursement claim form
The reoccurring reimbursement claim form is so important, because you don't have to submit a claim every month if you use this form. That means you're only doing it once per year.
2. The regular reimbursement claim form
Let's say the client has one major dental claim that's $600. That's a one-time charge, so you'd want to use just use a regular reimbursement claim form – not a recurring one.
3. Claim the Medicare Part B premium
The Medicare Part B premium comes out of their social security check, and that's the biggest expense that people don't apply for the reimbursement.
They may have a lot of reimbursement money left over at the end of the year, and while it's true that the funds roll over, if you die, your beneficiaries don't get what's left in your account. We have some that had $10,000 left in their account. If they kick the bucket, no one gets it. The company wins.
4. Make sure you have the forms for your client since each form is unique
The forms are all barcoded. They are not generic. The husband can not use the wife's form and you can't get any forms from your buddy. If the husband gets $3,000, and the wife gets $3,000, they can't combine that for each other. It's totally separate.
Example of a Reimbursement Form with Barcode
To get the forms, the client should request them from their health exchange (Aon, OneExchange, Via Benefits, etc.). They are supposed to receive them from the exchange, but they often don't know what it is and throw it away.
Help Your Retired Clients!
Remember these high points:
- You can save your client money on their Medicare Supplement.
- You can help your client with the confusing and cumbersome claim forms.
- You can help your client utilize all of their reimbursement money.
- You can clarify some of the confusing details, like the fact that they only need to buy ONE product from the exchange and also that they can claim their Medicare Part B premium.
This is not only a great opportunity for you, but you're going to help a lot of retirees make the most of their employer reimbursements!
Good luck, and post a comment below if you have any questions for me!