Alcoa retirees largely optimistic about insurance switch

Alcoa Inc.'s decision to send its white-collar retirees to a private exchange to shop for health insurance didn't surprise some of them.

The company held meetings for retirees Wednesday and Thursday in Green Tree to explain the changes, which are part of a growing trend among companies looking to reduce benefit costs.

Health insurance premiums for Alcoa Inc.'s white-collar retirees have risen sharply in recent years, prompting many to jettison the company plan and use the money to buy cheaper coverage on the open market, several retirees said.

“They were steering us in this direction in the last couple of years,” said Jay Zelezniak, 66, of Level Green, a former security manager who retired five years ago after 33 years. He kept the Alcoa plan but said he knew others who took the money to look for cheaper alternatives.

Zelezniak was among about 300 retirees who packed a morning session Thursday at which the changes were explained with the aid of slide shows by representatives from Alcoa and a company that operates a private insurance exchange where retirees will shop for coverage.

Instead of a company-administered plan, Alcoa will give its retirees a set amount of money based on their years of employment at the aluminium-maker to buy coverage through OneExchange, an insurance marketplace operated by benefits consulting firm Towers Watson.

“I think that what they are offering is going to be better for me, but I'll find out for sure on Oct. 13,” Zelezniak said.

That's when he scheduled an appointment to talk to benefit advisers from OneExchange.

Retirees said it appears plans on the exchange will offer the same or less expensive premiums than they paid under Alcoa's retiree plan. And coverages appear similar or better. Especially attractive, retirees said, is the opportunity to talk to licensed benefit advisers who will help them make informed decisions on which plan to choose from major insurers.

Alcoa joins the ranks of large companies shifting more responsibility for insurance coverage to employees and retirees. Retirees said they were told their numbers are shrinking, so the move to an exchange will spread costs over a wider pool of insured retirees, lowering costs.

Alcoa spokeswoman Melissa Lelii, reached by phone, declined to say how many retirees are affected by the changes or supply other details, such as how much money the company will give retirees to shop for coverage. “Based on our analysis, they will see a greater benefit of lower overall costs with the exchange options than with their current Alcoa plan,” she said.

Meetings were held this week in the Double Tree by Hilton Hotel and at Alcoa locations across the country to speak directly to as many retirees as possible, she said.

Alcoa's retiree health plan will end Dec. 31, and coverage will move to plans from a variety of insurers through OneExchange. Medicare-eligible retirees will be able to choose from among 13 Medicare Advantage plans, 11 Medigap plans and 19 prescription plans, retirees said they were told. Vision and dental insurance is optional.

“I think it's a positive,” said Amy Elder, 68, of Wilkinsburg, who retired in 1997 after 31 years in sales. “I think Alcoa did its homework and did not just cut us loose.”

Elder was one of three retirees who said they previously left Alcoa's retiree plan because of rising premiums. “I left as soon as I became Medicare eligible,” she said.

“I came out of the meeting feeling better. What they showed here today was less expensive than the Alcoa option,” said Jim Sams, 66, of Scott, who spent 42 years at Alcoa as a facilities manager. Sams abandoned the Alcoa health insurance plan for the private market because it was too expensive.

Sams said he chose Highmark's Freedom Blue PPO, paying a premium of $232 a month this year for himself and his wife.

Ed Markoff, 66, of Munhall said the Alcoa plan has been expensive, so he went with another level of coverage from the Freedom Blue PPO, paying $109 a month this year for himself and his wife.

Zelezniak, by comparison, stayed in the Alcoa retiree plan and paid $180 a month this year for himself, plus other coverage for his wife.

Retirees were told premiums for Medicare Advantage plans offered through OneExchange will range from zero to $224 a month; Medigap will range from $80 to $384; and Medicare Part D prescription coverage will range from $13 to $169 a month.

The meeting was “very informative,” said Dick Wehling, 83, of Ross, who retired in 1987 after 33 years in quality control. “We are going to change, but we will have advisers who are very knowledgeable to help us. I've been keeping really good records over the years, so after I talk to the rep, I'll have a better idea whether the change is good or not.”

“I'm scared; it seems like a lot to absorb,” said Elaine Snyder, 80, or Shadyside, who retired in 1983 after 32 years in sales and other departments. “It was so easy before; I didn't have to make a lot of decisions.” She will rely on family to help her figure out what to do.

John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882.