TVA will soon replace the basic and prescription Medicare supplement plan offered for its 15,000 retirees with new options for retirees to pick the type of coverage they want.
Effective Jan. 1, 2017, TVA will no longer offer a Medicare Supplement Plan, which is now provided by the Chattanooga-based BlueCross BlueShield of Tennessee. In its place, TVA will offer retirees over 65 years old a variety of plans for medical, prescription drug, dental and vision coverage through a private Medicare exchange.
To provide support, TVA has partnered with OneExchange, a coordinator of individual coverage in the marketplace owned by Towers Watson, to offer benefit advisors to help retirees select their own coverage plan from a variety of offerings.
"For TVA retirees, this is clearly a win," said Chris Hinton, TVA vice president of compensation and benefits. "Currently, our plan is one of those one size fits all. Once the private exchange is available to them, they will be able to go out and pick out which plan they want to use. "
One of the best benefits, Hinton said, is that the new plans offered through OneExchange will leverage the advantage of being among nearly 40 million other retirees who are covered by such private exchange plans. Hinton said TVA is following the lead of other major employers with post-retirement health benefits in moving toward the private Medicare exchange market.
The changes next year will come just three months after TVA also plans to change some of the language and cost-of-living options in its retirement plan as part of a 20-year plan to restore the fiscal solvency of that underfunded plan. The TVA Retirement System (TVARS) board voted 4-3 on Monday to approve changes in October in their retirement benefit plan in exchange for TVA committing to provide at least $300 million a year toward the underfunded pension program.
TVARS directors previously voted in May to changes sought by TVA in spite of opposition from some retirement system board members worried that TVA is not adequately funding the pension plan to guarantee future payments to retirees.
For its Medicare supplement, however, TVA will not change its employer contribution and officials said the changes are designed to help retirees, not save money for TVA.
"This new approach gives you the freedom to choose the coverage that best meets your needs based on a broad selection of plans available from a variety of different carriers," Sue Collins, a senior vice president and chief human resources officer for TVA, told retirees during a recent town hall meeting. "It also gives you the flexibility to shop for the right level of coverage for you and lets you decide how to best spend your health care dollars."
Collins said the new private Medicare Exchange program will allow TVA retirees to pick from more insurers and select more medical, dental, vision and prescription drug coverage options.
Suzan Bowman, chairman of the Tennessee Valley Authority Retirees Association, said Tuesday retirees won't know the full impact of the new Medicare supplement options until the open enrollment period this fall details the costs and benefits offered under different plans.
"I'm not sure at this point if it is going to cost less for retirees and whether they will have better coverage as a result," Bowman said. "We just don't know yet because it will be October before any of the retirees can actually call the new company (OneExchange) and talk with them about their individual needs and get a quote for what any particular plan will cost."
Mary Danielson, director of communications for BlueCross BlueShield of Tennessee, said the insurer expects to keep many of the TVA retirees with its Medicare supplement plans even though the retirees will have many other options and insurers to choose from in the private exchange.
"This is an Exchange that we've worked with before," Danielson said about the OneExchange administrator. "We've served these TVA employees and retirees for many years. Given that trusted relationship and the value we deliver, we feel we are well positioned to be their continued choice for health care coverage."