Caterpillar Employee – Loosing Health Insurance Coverage?

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Questions about Caterpillar Insurance Coverage?

Certain Caterpillar employees who retired after 2/1/1991 have been sent a letters regarding the discontinuance of their Caterpillar provided health insurance coverage. There are two issues why Cat retirees may have received these letters.

The first issue was a letter dated 3/16/09 stating that beginning 1/1/10 and when the retiree and/or spouse turn age 65 or older, Caterpillar will open and deposit $3000, or an amount based on service and other factors, in the qualified retiree’s Health Reimbursement Account (HRA). The retiree could then use this money to purchase his/her own coverage or spend it on qualified medical expenses.

Let’s assume the retiree uses this money to purchase his/her medical insurance coverage. The retiree will have the option to choose their type of coverage. They could choose either an individual Medicare Plan (Medicare Advantage Plan [MA]) or Medicare Supplement and if the prior plan does not include prescription coverage, a MedicareRX plan. Caterpillar is making available Extend Health, an agency with offices in Salt Lake City, Chicago and Los Angeles. This agency will provide informational packets in August and seminars beginning in September. You must use this agency to have Caterpillar set up and fund your HRA account.

Many of you will have the question – how are my current conditions covered and will insurance companies accept me or possibly decline me due to my health. Know that anyone who looses creditable coverage (like this situation) has a 63 day period of time where they can apply to any company and have guaranteed issuance of any Medicare policy that insurance company offers. Note; you cannot be issued a MA plan if you currently have “end stage renal disease”, but you will be issued a Medicare Supplement. It is very important to know prescription coverage is NOT included in all Medicare Plans. Be sure to look into prescription coverage and possibly dental coverage. You may call Caterpillar’s call center at 1-800-447-6434 for answers to your questions.

The second situation is where employees are within $25,000 of reaching Caterpillar’s health plan maximum benefit. If this is your case, you should ask Caterpillar (800-447-6434) for a ”Letter of Creditable Coverage” and gather information on Medicare Plans, (or) Medicare Supplements, and Medicare Drug plans. As you approach your Caterpillar maximum benefit, you also will be able to purchase any Medicare Supplement (any MA if you do not have end stage renal disease) through a special election period. Be sure to work with an insurance professional so that you do not loose this window of opportunity. Once again, if you apply within 63 days of loosing this “creditable coverage” you will have a guaranteed option to purchase Medicare Supplement coverage on your own.

In the second situation, you can work with local insurance professionals. The benefit for working with local representative is that you will hopefully have local assistance come claim time and in the future.

Written by

Steven A. Buttice is the president of Medical Reimbursement & Management Services, Inc., a firm specializing in issues affecting seniors, including seminars and consultation on Medicare Plans, Long Term Care and other types of insurance, claims issues, and sales/service of insurance products since 1984.

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