June 12, 2014 at 7:54 pm

Non-Medicare eligible Detroit retirees given new 'Cadillac plan' health care option

Detroit — City retirees are receiving notification of an additional — and costly — health care plan they can enroll in until designated trusts outlined in Detroit’s bankruptcy plan kick in next year.

Enrollment for the city-sponsored vision, dental and PPO plans is being offered to non-Medicare eligible retirees younger than 65 through June 20. If selected, it would go into effect on Aug. 1.

Bill Nowling, spokesman for Emergency Manager Kevyn Orr, stressed the new plans are “completely optional” and were put forward at the request of some bargaining units that wanted to provide their members with the option.

“Some people may want to pay their own and have a higher Cadillac plan as opposed to a Buick plan,” Nowling said. “It’s certainly nothing the city thinks retirees have to act upon but some associations that represent them wanted to have it available as an option. For most people, it’s not going to make sense financially.”

The enrollment notice says the medical, dental and vision coverage plans are being offered at full cost to retirees. The optional Blue Cross Blue Shield of Michigan PPO plan carries a monthly fee of $1,303.72 for one person, $3,128.93 for two people and $3,911.17 for a family.

On March 1, the city dropped its traditional health insurance plan for retirees not eligible for Medicare. Instead, retirees and survivors were given monthly stipend checks of $125 or $175, depending on income level.

Non-Medicare eligible retirees who enroll in the city-sponsored PPO plan must waive their current monthly stipend and, instead, receive a stipend of $100 in addition to coverage under the medical plan.

Nowling said the city has encouraged retirees to sign up for health care exchanges and use the stipend provided by the city.

After Jan. 1, retiree health care will be offered through the city’s newly created independent health care trusts — known as Voluntary Employee Beneficiary Association (VEBA) — to provide health care benefits for retirees. The trust will hold the partial funding of the obligations toward retiree health care and will determine how much retirees will receive.

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