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What is a Retiree HRA Account?

Hi Toni:

My husband is an oil company retiree and two weeks ago, we received a letter stating that his employer is terminating current Medicare eligible retirees group benefits with a termination date of September 30, 2021, when the plan renews.

His employer has chosen a specific HRA company to help us choose the right Medicare and Part D options and assist with administering the HRA account that pays our insurance premiums.  My husband and I will want an appointment with your office to sort out what is the right option for our retiree benefits.

We do not want a major catastrophe by making the wrong decision for our future Medicare needs. Thanks, Becky from Sugar Land area

 

Becky:

I have good news for you because I personally attended an Employer Retiree Educational Seminar recently. The seminar was professionally presented with the speaker making sure that all the retirees questions were answered.

The insurance rep advised all that attended to discuss with their doctors, hospitals and pharmacies which Medicare Advantage, Medicare Supplement and Medicare Part D plans, they accepted. She discussed how to prepare for the phone consultation and that the retiree and spouse will be assigned a specific benefits counselor, not a random customer service rep that moves on to the next phone call.

From the meeting, I learned that for the remainder of 2021, the retiree and spouse who are in a Retiree plan will have a specified amount to help pay for Medicare and Prescription drug plan’s monthly cost.

A Health Reimbursement Arrangement (HRA) is an account that has been established for the employee (you) and funded by an employer.  You can use the funds in your HRA to receive reimbursements for eligible health care expenses up to the allocated amount.

The HRA is tax-free if the retiree and/or spouse meets certain requirements to qualify for the HRA funding.

Once you have enrolled in a Medicare plan through employers which provide HRAs, one will then have access to the HRA and use the HRA to reimburse your costs for items listed below:

  • All or a portion of the monthly premiums for individual Medicare Supplemental insurance, Medicare Advantage plans, Medicare Part D Prescription drug plan.
  • Medicare Part B or D premiums (if any)
  • Eligible medical out of pocket such as coinsurance, co-payments and deductibles
  • Dental and/or vision premiums enrolled through the HRA plan.
  • Your HRA can be used to pay for all IRS Code Section 213 (d) expenses.

The speaker discussed “what is a guaranteed issue” time for the retiree who is enrolled in Medicare Part A and B with health issues which prevents one from qualifying for a Medicare Supplement medically.

With guaranteed issue rights, an insurance company must:

  • Sell you a Medigap/Medicare Supplement policy. “You have the right to buy any Medigap/Medicare Supplement Plan A, B, C, F, K or L that’s sold in your state by any insurance company if your Medicare Part A starts prior to January 1, 2020. Those who’s Medicare Part A begins after January 1, 2020 qualify for Medicare Supplement Plan A, B, D, G K or L with plans C and F no longer available.
  • Cover all your pre-existing health conditions.
  • Cannot charge you more for a Medigap/Medicare Supplement policy, regardless of past or present health problems.

Have questions regarding Retiree Medicare plan changes or personal Medicare issues email the Toni Says® team at info@tonisays.com or call 832-519-8664.