What is it and How Does it Work?
The Defined Dollar Benefit Program (DDB), the University’s retiree medical program, is
effective July 1, 2004.
- The DDB program is the only option available to retirees and spouses age 65 or older.
-
The DDB program is an option for retirees and their spouses age 62 to 65.
(Alternatively, the retiree and spouse may elect the University’s active medical
coverage during this period).
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Faculty and staff hired on or after July 1, 2004 must meet an age and service
requirement equal to 85 with a minimum age of 62 to qualify for retiree medical.
General Information
The Defined Dollar Benefit (DDB) program extends the cost-sharing concept that the University
has adopted for active medical coverage providing a reimbursement account for you and your eligible
spouse upon retirement.
On the first of each month, a fixed amount of credits will be applied to your account that may be
used for reimbursement of retiree medical coverage. For the 2008-2009 plan year, the amount of credits
per month is $290 for you and $290 for your spouse if he or she is age 62 or older. Your eligible
spouse is the person you are legally married to at the time of your retirement.
Credits will not accrue while you or your spouse are covered by the University’s active medical plans.
The amount of credits provided will be reviewed annually and increased in accordance with the medical component of
the Consumer Price Index. While the amount of credits for the 2008-2009 plan year covers the full cost of coverage
in the post-65 retiree medical plans, over time retirees will contribute toward the cost of this coverage.
Your credit balance will accrue from month to month and year to year if the cost of retiree medical coverage does
not exceed the number of credits in your account.
Credits will also accrue if you have coverage through a spouse or another employer.
To the extent the retiree medical plan costs more than the credits in your account, you will owe the balance and
will be billed accordingly.
Credits may be used to reimburse you or your spouse for retiree medical coverage only. Credits will not be used for
reimbursement of any other active employee coverage outside of the University.
Note: The University reserves the right to modify or terminate these benefits at any time.
Modifications that may affect this plan include those made by the federal government’s Medicare or Medicare-related
programs.
Program Administration
The program will be administered by a third-party administrator – EBDS which will be responsible
for crediting your account each month and billing for any amounts due.
Listed below are several important points about the administration of the program:
- Credits will be applied on the first day of each month.
- On the first day of each month your DDB account will be debited for the monthly premium.
- Amounts due on premiums that exceed the DDB credits will be deducted through automatic debit of an account you designate.
- Credits are applied separately to your account and the account of your spouse.
- In the event a balance is due for you and your spouse, two separate debits will be made. The debits may be taken from the same account.
- Any amount submitted for reimbursement for non-University retiree medical coverage will be transferred via direct deposit
to an account you designate.
Examples of How Credits May be Applied
1. To purchase University-sponsored coverage:
Example:
I am 65 years of age upon retirement. My spouse is age 63. Upon retirement, I elect UPMC
for Life. My spouse is pre-Medicare at age 63, and elects to continue active individual
coverage through the University.
Based on the charts showing the monthly premiums today, the following applies:
| Your cost
of coverage is: |
$149 |
| Your
credits are: |
$290 |
| The amount
of extra credits that accrue in your account are: |
$141/mo. |
| Current
active cost share of individual
Panther Gold is: |
$50 |
Currently the full cost of Panther Gold is $361 per month. However, the amount your spouse
pays for coverage is $50 as long as he/she remains in the active plan until age 65 unless
he/she elects to move into the DDB program before then.
EBDS would apply the remaining $141 dollars in credits to your account. Your spouse would be
balanced billed $50 per month. Note that the two accounts are kept separate.
2. To purchase Non-University coverage:
Example:
Both my spouse and I are 66 years of age upon retirement. Upon retirement, we move to Florida.
We liked the HMO coverage we had in Pittsburgh but the two Medicare HMOs sponsored by the University
do not have network coverage in Florida. Our friends tell us that there are other Medicare HMO
coverage options in Florida. The current cost of individual coverage there is $230 per month.
| Your cost
of coverage is: |
$230 |
| Your
credits are: |
$290 |
| The amount
of extra credits that accrue in your account are: |
$60/mo. |
| |
|
| Your
spouse’s cost of individual coverage is: |
$230 |
| Your
spouse’s credits are: |
$290 |
| The amount
of extra credits
that accrue in your spouse’s account: |
$60/mo. |
You would pay the premium to the Florida HMO and submit a receipt to EBDS. A total of $230 would
be deducted from your credits of $290. EBDS will transfer the $290 via direct deposit. As a
result, a $60 balance would remain for the month. The same process would apply for your spouse.
3. To accrue credits for future use:
Example:
I am leaving the University at age 62. My spouse, who is also 62, is going to continue working
and has the option of placing me on his/her employer’s coverage. What are my options under the
Defined Dollar Benefit Program?
You may both elect not to join the University’s retiree medical program and accrue credits for
future use. At a later date, you may join the University’s program but must show proof of
continuous coverage for the past 18 months in a comparable program.
| The
credits you accrue each month: |
$290 |
| The
credits your spouse accrues each month: |
$290 |
| Total
Credits accrued each month:
|
$580 |
|
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Benefits Department · 200B Craig Hall · Pittsburgh, PA 15260 · 412-624-8160
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