The University of Maine System is offering retirees the option to continue with their existing health care plan after they responded to the switch to a new plan — proposed without negotiation or prior warning — with harsh criticism and a lawsuit.
Former employees can now choose between staying with the Aetna group health plan or switching to the new Aon Retiree Health Exchange plan, which the system previously announced retirees would have to switch to by Jan. 1, 2021. The university system also said it would now cap out-of-pocket expenses at $1,500 for retirees who choose the Aon plan.
The change rolled out in August, first reported by the Bangor Daily News, would have switched university system retirees from a defined benefit to a defined contribution plan for the health benefits they receive. A defined contribution plan provides retirees a certain amount of money to access undefined health benefits. A defined benefit plan entitles retirees to benefits outlined ahead of time, irrespective of cost.
Last week, after several former UMaine System employees shared their grievances with the UMaine System Board of Trustees and 11 retirees filed a lawsuit, the system announced it would pause the switch to the new health care plan.
Read more on UMS health care plan
The switch was expected to save the public university system $2.5 million annually on its retiree health insurance benefit, which fills Medicare coverage gaps for eligible retirees. But retirees — about 3,000 of whom are eligible — raised concerns that the switch will increase their health care costs in the middle of a pandemic.
“For many of our retirees this is a huge win, because their prescription drugs and health care costs were going to be out of their budgets,” said Lydia Savage, a geography professor at the University of Southern Maine and president of the Associated Faculties of the Universities of Maine’s USM chapter.
“When the switch happened, the system said everybody would essentially be the same or even better off, but as people found out more and more, it was very clear that this was going to be devastating for many of our retirees.”
Retirees will still have the option of switching to the new Aon plan. Those who switch to the new plan will be given $2,100 for individuals and $800 for spouses to spend on care in a separate account and will need to shop for plans through the Aon Retiree Health Exchange. Retirees will pay for their care, then receive reimbursement.
“The marketplace is changing, and we owe it to Maine’s taxpayers and the university community to find a better, more affordable way to meet the supplemental health insurance needs of our former employees,” UMaine System Chancellor Dannel Malloy aid.
Retirees who choose to unenroll from the Aon plan and go back to the old Aetna plan will have to do so before Dec. 31, according to an email the Maine Education Association sent to retirees on Wednesday morning. For those who are still enrolled in the Aetna plan, coverage will continue through the next year.