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Association of
Ameritech/SBC Retirees SBC has responded to three follow-up questions on the new medical plan posed them on July 7, 2005. In addition, I am also adding the Q&A to two subsequent questions. Please note the surviving spousal costs as stated in answer number one: Here are the three questions and the answers provided by Sue Colburn’s staff: Q: No where on the New Medical plan document is there any mention of survivor benefit coverage other than on page 2 where it states certain rates DO NOT apply to surviving spouses? The disposition of surviving spouses in the new plan needs to be clarified. A: A management retiree's surviving spouse would be eligible for this new plan, SBC Medical Plan, beginning 1-1-2006 if the retirement date was according to the dates we covered with you during our meeting in Chicago (March 1, 1991 and after). The surviving spouse 100% costs of coverage for the new SBC Medical Plan will be around $500 per month for individual coverage for a non-Medical eligible survivor or about $300 for individual coverage for a Medicare eligible survivor in 2006. Q: The plan states on page one that it “distributes costs to participants based on their individual use of health care services rather than distributing costs to all participants, regardless of how often or how little they use their medical plan.” If this is the case why would the active employee plan cost so much less than the retiree plan? Based on the stated strategy they should be the same. A sixty year old active employee should pay the same as a sixty year old retiree; much like age bands for term life insurance. Correct? A: Rates are calculated separately for active and retired employees, based on claims experience. In addition, rates for retired employees are calculated separately for Medicare and non-Medicare. The claims costs for active employees in the aggregate are much less than those claims costs for all non-Medicare retirees in the aggregate. For this reason the 100% cost of coverage which is used to calculate the contributions for a retiree and an active employee will differ and result in a lower contribution for actives than that for a retiree but is representative of the claims paid from the plan . This same process is completed annually. Q: The next paragraph on page one refers to Caremark covering prescription drugs within the plan. If this means that prescription drugs are part of the deductible, how are we assured we will be getting the best price? If we pay for the first $2,000 and are compelled to use their service, what incentives does Caremark have to reduce prescription costs? Would it be to our advantage to have an option of, say, the Walgreen’s plan? We have heard from other retirees that Caremark provides wretched service yet we will be compelled to use them AND pay the full boat up to $2,000? What will compel SBC to negotiate for active employee or the retirees? SBC has demonstrated a strategy of outsourcing services not associated with the core business. While I agree with that strategy, with the new plan, an ombudsman of some kind is more necessary than ever. A: Regardless of whether the participant has met the deductible, as long as the SBC Caremark Prescription Drug Card is presented to a Caremark network retail pharmacy, the participant will pay the SBC negotiated discount price for the prescription drug. Participants will also receive SBC's discount pricing through Caremark's mail order program. Drug purchases at network pharmacies (both retail and Caremark's mail order) count toward the network deductible. Prescription drugs purchased at non-network pharmacies will count toward the non-network deductible. Also, SBC's size and scale allow us to negotiate "best in industry" prices from Caremark. The two subsequent Q & A: Q: Before SBC acquired Ameritech, retirees had access to the Hoffman Estates Fitness Center. Today new retirees can not use the workout center. With a preventative care strategy being unfolded, retirees should be encouraged to maintain fitness. Allowing the use of company sponsored centers seems to make sense. We all know that a healthy life style is critical to lowering medical costs. Has any discussion taken place for retirees to gain access to these services? A: Clearly, we want to promote healthy life styles, and Fitness facilities fall under the broader category of "wellness". However, at this time, we have not developed a strategy for fitness facilities. I made a follow-up call and asked for a clarification of SBC’s current philosophy regarding this kind of benefit. More to come. Q: When will those employees and retirees with HMO’s be able to make an informed choice for 2006? A: HMO offerings will be presented to all employees and retirees as usual during the October-November timeframe. The management retirees who will have the new SBC Medical Plan will be given an enrollment worksheet listing the HMO offerings available for their home zip code in October. The targeted mail date will be around October 19. The enrollment period for this group is from October 27 - November 16 at 7PM Central time. As we get closer to Annual Enrollment, information will be mailed informing you and others when your enrollment begins. |