The emerging private HIX model for active employee populations will learn valuable lessons about how this approach has been applied to the retiree marketplace in recent years. One issue worth closer examination involves the prospect of hosting an off-cycle benefits enrollment.
Marty Martin, a vice president of Aon Hewitt Navigators, says many employers are considering carving out retiree enrollments between March and June to improve the educational experience.
“It really does give them more time to understand the material,” he says, noting how they can avoid getting lost in the clutter of the traditional open-enrollment season.
Martin says the objective is to help retirees better evaluate the high volume of insurance carriers and breadth of product offerings in a more low key, pressure-free setting so that they choose plans that best meet their individual needs.
The larger point is that it’s crucial to promote the importance of making informed choices for a group that requires more hand holding, especially given the complexity of prescription drug plans, multiple drug tiers and poly-pharmacy challenges.
Of the 550 companies covering nearly 4 million retirees that responded to a recent Aon Hewitt survey, only about 20% offer guided access to Medicare Advantage, Medigap or Medicare Part D plans through an individual HIX. However, another two-thirds of the survey respondents are considering this strategy.
Aon Hewitt estimates that employers can reduce their annual gross retiree medical spend by 20% to 50% by transitioning retirees to the HIX model, while retirees can save on average $1,000 a year when purchasing their health benefits this way.
Aon Hewitt Navigators has served more than 250,000 retirees since 2010, offering health care coverage through more than 80 insurance carriers and 3,300 plans. Formerly known as Senior Educators, the HIX has had its share of growing pains as more employers use this model to reduce their post-retirement medical benefit liabilities, which have long been expensed on balance sheets.
One such incident occurred when Aon Hewitt Navigators failed to meet a Dec. 31, 2011 deadline to complete enrollment for Medicare-eligible retirees of State Farm Insurance Cos. who were being removed from a PPO plan. It also overbooked appointments for about 20% of the company's 24,000 retirees nationwide and faced technical glitches.
Maureen Scholl, CEO of Aon Hewitt’s health care exchanges, recently wrote State Farm retirees that “the experience we promised was not delivered and the trust you placed in us was eroded… We heard your concerns and are committed to making this right.”
State Farm is now closely collaborating with Aon Hewitt Navigators to manage expectations and monitor improvements to processes, technology and service. The retirees will finally transition to new coverage on June 1.
After working out the bugs, it’s no wonder the retiree HIX operator that sees value in off-cycle enrollment. And despite having treaded troubled waters, the HIX recently reported that 92% of the retirees it served last year said they were satisfied with their overall experience. “We believe tremendous progress was made in 2013 versus 2012,” Martin says.
