Mix of medical plans to change for 2007

Updated 11:00 AM May 8, 2006

Mix of medical plans to change for 2007

By Dave Reid
HR Communications

After its annual review of medical insurance plans offered to faculty, staff, retirees and surviving spouses, the University has decided to eliminate the Blue Cross Blue Shield/United (BCBS/United) traditional plan at the end of 2006.

A mix of seven plans, however, will continue to be available to benefits-eligible employees, retirees and surviving spouses, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), a point-of-service (POS) plan and a comprehensive major medical (CMM) plan, plus GradCare for eligible graduate students.

"The University is strongly committed to offering a choice of high-quality, comprehensive medical plans for faculty, staff and retirees," says Laurita Thomas, associate vice president for human resources. "This change is the result of the University's annual review of insurance plans, which helps us determine when and if adjustments are needed. It's our opportunity to correct for changes in the medical insurance market, as well as shifts in our own enrollment patterns."

The analysis revealed declining enrollment in the BCBS/United plan, down more than 40 percent since 2005 when the University began offering two PPO plans—M-CARE PPO PLUS and Blue Cross Blue Shield Community Blue PPO.

"The PPO plans include access to physicians all over the country, which was a feature that made the BCBS traditional plan attractive to some employees and retirees," Thomas says.

Both PPOs are portable, allowing access to physicians in nationwide networks rather than within an HMO service area. But they do not depend on the more-costly design of traditional coverage plans. The BCBS Comprehensive Major Medical (CMM) plan also offers flexibility in choosing providers, but with greater out-of-pocket expense.

PPO plans generally yield monthly premium savings for most members compared to traditional plans, and do not require that annual deductibles be met for in-network office visits or the filing of paper claims for reimbursement. Additionally, PPO members receive prescription coverage through the U-M Prescription Drug Plan with tiered drug co-pays and no annual deductible.

Current members of the BCBS/United traditional plan do not need to take immediate action. The plan will continue through 2006 and members will have until the end of 2007 to file claims. Individuals currently enrolled in the BCBS/United plan should choose a new plan during Open Enrollment Oct. 9-20. Elections made at that time will become effective Jan. 1 and remain in effect for the calendar year.

BCBS/United plan members who make no election during Open Enrollment automatically will be enrolled in the BCBS Community Blue PPO, effective Jan. 1, to prevent any lapse in coverage.

For more information, visit www.umich.edu/~benefits/new/bcbsmunitedmsg.htm. To speak with a benefits representative in the HR/Payroll Service Center, call 615-2000 (Ann Arbor campus phones), (734) 615-2000 (local) or (866) 647-7657 (toll-free long-distance).

Information on all plans can be found at www.umich.edu/~benefits/plans/medical/index.htm.

Why the change?

• PPOs offer nationwide physician networks;
• Declining enrollment in the BCBS traditional plan;
• More than 90 percent overlap between physicians and hospitals in both the BCBS traditional plan and the BCBS Community Blue PPO;
• More than 90 percent of physicians nationwide accept the BCBS Community Blue PPO plan;
• Switching from the traditional plan to a PPO, HMO or CMM plan can yield significant premium savings for many members;
• PPO or HMO plans do not require deductibles for drug coverage or in-network office visits.

What steps do I take?

• Current BCBS/United plan members should choose a new plan during Open Enrollment Oct. 9-20;
• If no new plan is chosen, members automatically will be enrolled in BCBS Community Blue PPO to prevent a lapse in coverage.

Mix of medical plans to change for 2007

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