February 12, 2014 at 11:25 pm

Detroit retirees face Saturday deadline for health insurance decision

Detroit retirees younger than 65 or not eligible for Medicare face a Saturday deadline to enroll in a private insurance plan to avoid a disruption in coverage next month.

The city sent retirees an “urgent notice” this week that they need to purchase a plan through the federal government’s Healthcare.gov insurance exchange website by Saturday or face the loss of insurance coverage next month.

“Effective March 1, the City of Detroit will not be providing health insurance to you,” the city’s notice says. “You must sign up and obtain other health insurance coverage.”

Detroit’s traditional health insurance plans for these retirees end Feb. 28 under a deal Emergency Manager Kevyn Orr reached late last month with a committee representing retirees in the city’s bankruptcy case.

Under that deal, the city will give retirees younger than 65 a $175 monthly stipend to subsidize the cost of their insurance if their annual household income does not exceed $75,000. The city also will give retiree spouses $125 per month for insurance under the same household income restriction.

The city has agreed to give a $300 monthly stipend to retirees older than 65 who are not eligible for Medicare because they did not pay into the system while they were working.

Orr spokesman Bill Nowling said Wednesday it’s unclear when the city would begin issuing the monthly insurance subsidy checks to retirees.

“That we don’t know,” Nowling told The Detroit News. “It’s obviously not going to happen on March 1.”

Cash benefits may not get paid out until May, Nowling said, but would be retroactive to the beginning of March.

Detroit’s notice to retirees said those who miss Saturday’s deadline will have to enroll in an insurance plan on Healthcare.gov by March 15 to get insurance on April 1, but will be without coverage for a month.

Pension officials said they were instructed Wednesday morning to post the notice on each of the funds’ websites. The document was the product of a Tuesday meeting between attorneys for the city and retiree committee. It’s since been distributed to the city’s benefits department, the pension funds and the president’s offices of all city unions, officials said.

At an employee benefit meeting on Wednesday, pension trustees expressed frustration and confusion over the deadline.

Thomas Sheehan, vice chairman of the General Retirement System, said he’s concerned retirees are not being properly informed. Some notices, he said, have gone out to incorrect addresses — including his own.

Sheehan said a previous letter on the health care exchange plan was sent to a residence he’d lived in a decade ago. The retirement systems were not asked to provide a current list of retirees to aid in the mailings, he said.

“There’s a failure to communicate with people in a sufficient amount of time and let them make their choice,” Sheehan said. “It’s going to be chaotic at the beginning of March.”

There are 13,361 retirees who are not eligible for Medicare between the city’s two pension funds. The Police and Fire Retirement System accounts for 9,299 of the affected retirees and of the General Retirement System’s 12,134 retirees, 4,062 are under 65.

Wendy Brown, a benefits manager for the city, reiterated at Wednesday’s benefit meeting that this is a “reminder” and not the first notice to retirees. The city has also hosted more than 40 meetings with officials from Blue Cross Blue Shield of Michigan and HAP to discuss the action. Those who have enrolled should receive their new cards on or before March 1, she said.

Separately, Blue Cross has set up a telephone line for Detroit retirees to purchase insurance by calling (855) 292-5507, according to the city’s notice to retirees.

Saturday’s deadline to enroll does not apply to city retirees who have insurance through a new employer or a spouse.

Last fall, Orr proposed giving individual retirees $125 per month for insurance costs, but the changes were put on hold, in part, because of the widespread technical glitches in the federal government’s insurance website.

The retiree committee sued the city over the reductions in insurance benefits and eventually negotiated slightly better benefits.

Still, Orr won steep concessions from retirees in his quest to lower the city’s annual health insurance bills. The city has been paying $604-$1,834 in monthly premiums for retirees younger than 65, according to the retiree committee lawsuit.

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