Benefits Myth Busters!
A joint communication
from the Union members of the CAAT Academic and Support Joint Insurance
Committees and the OPSEU CAAT Retiree Group Insurance Advisory Committee
early 2000’s OPSEU was directly involved in helping create the CAAT Retiree
benefit plan and through the CAAT Academic and Support collective agreements,
OPSEU negotiated the right to appoint retiree representatives to sit on the CAAT
Retiree Group Insurance Advisory Group (CRIAG). This group provides a much
needed voice to our retired members on current and developing health care
coverage issues and benefit plan design of the CAAT Retiree Benefit Plan.
Retiree Benefit Plan currently provides group benefit coverage at an affordable
cost to over 4,100 retirees from the colleges, with three levels of Extended
Health Care benefits to choose from, along with Dental Care and Basic Life. A
key to being able to provide these affordable benefits in retirement is having a
large, stable pool of people participating in the benefit plan.
It has recently
come to our attention that some colleges and OPSEU Locals have been promoting
the Retired Teachers of Ontario benefit plan, and potentially other retiree
plans. The joint insurance committees as a whole have a concern about inviting
other insurance companies in to market their retiree benefit plan(s) to our
members and think it is important to educate locals about our retiree benefit
plan, and why we are uncomfortable with the promotion of other retiree benefit
plans. The reasons are as follows:
Like any group benefit plan, the CAAT Retiree Benefit Plan needs a large
growing pool of participants in order to keep the plan stable, viable and
affordable over the long term. When we invite other groups to market their
insurance company, we are helping them to build their plans rather than our own.
As previously mentioned, OPSEU retirees have a negotiated right to
participate in their CAAT Retiree Benefit Plan through the CRGIAC. Other retiree
benefit plans do not provide a “seat at the table”.
Promoting other plans could be seen as endorsing these plans. This could
potentially carry some legal liability should a retiree decide not to join the
CAAT Retiree Plan because they attended one of these OPSEU sponsored sessions
and later end up regretting their choice because of maximums and/or coverage
issues under the other plan. We have heard of several retirees who have asked a
second opportunity to join the CAAT Retiree Plan after they went elsewhere for
coverage, and discovered they had not picked adequate coverage or quickly
reached the annual or lifetime limit under the other plan.
myths out there are informing the decision making process for retirees which
could have a negative impact on them in the future. Through this communication
we hope to debunk these myths! We hope you find the following information
helpful and informative.
In health &
Chair CAAT Academic JIC
Chair CAAT Support JIC
Joan Cunnington CRGIAC-Academic
retirement benefit plans are created equal. Fact or myth?
Myth. Retirement benefit plans come in
all shapes and sizes and of course, costs! When assessing retirement benefit
plans, you need to look at the amount and type of coverage you are receiving for
the price that is being charged. Comparing prices only is not going to result in
good decision making. You need to be aware of the type of coverage (drugs,
extended health etc, vision, hearing, hospital); the level of coverage (100% vs.
90%, vs. 80%); any deductibles that need to be met before the plan will pay,
and most importantly, the yearly and/or lifetime maximums that may apply.
When it comes to making our benefit plan
choices at retirement, we don’t know what the future holds, so we tend make our
decisions based on today’s reality. If we are fortunate enough to be in good
health when we retire, we put our priorities in a different order than if we are
in poor health. As we age health issues will likely arise and the later part of
retirement is typically when a retiree’s health care needs, and related costs,
If I don’t
go into the CAAT Retiree Plan when I retire, I won’t be able to join it at a
later date. Fact or Myth?
Fact. If a retiring member does not
elect coverage under the CAAT Retiree Benefit Plan within 31 days of retirement,
they will not be able to join the plan at a later date. While this may seem
unfair at first glance, this helps protect the plan against adverse selection,
and keep the plan affordable for retirees. You will note that the other retiree
plans all have some sort of time frame for joining them.
Benefits are more expensive than other plans. Fact or Myth?
Myth. The CAAT Retiree Benefit Plan
currently has three levels of Extended Health Care benefits to choose from,
along with Dental and Life benefits, all of which are competitively priced for
their level of coverage. Members contemplating which benefit plan to join need
to look not only at the cost, but also at the level of coverage and any maximums
that apply. The CAAT Retiree plans provide excellent coverage at a competitive
In addition, when you join the CAAT
Retiree Benefits Plan there is:
No membership fee or requirement to join an association (e.g., Retired
Teachers of Ontario which charges $1.25 per $1,000 of pension to be able to
participate in their insurance plan)
3 plan designs to choose from with the ability to move down in coverage
A voice in your benefit plan with representatives from both CAAT Academic
and CAAT Support retirees being present on the CAAT Retirees Insurance Advisory
If I join
the CAAT Retiree Benefit Plan I can’t have travel insurance. Fact or Myth?
Myth. The CAAT Retiree Benefit Plan does
not feature travel insurance as its primary goal is to protect the health of
plan members. Travel is a decision made by a retiree and travel insurance is
readily available through many sources at low costs for individuals. The CAAT
Retiree Plan is focusing on keeping benefits affordable for all retirees and
ensuring medical needs are met throughout the different stages of retirement,
not just in the early stages.
I don’t need
to worry about drug cost because when I turn age 65, the Ontario Drug Benefit (ODB)
will cover all of my costs. Fact or Myth?
Myth. While it is true that Ontario
residents become eligible for the Seniors Ontario Drug Benefit program when they
reach age 65, this program does not cover all drugs. In fact it covers
only drugs that are set out in the formulary, and the formulary has changed, and
continues to change over time; with drugs being removed from the list from time
to time. This means that if your doctor prescribes you something not on the ODB
formulary, you have to pay for it out of your own pocket if you do not have drug
The CAAT Retirees Benefit Plan currently
covers drugs at 85% and is a second payer to the ODB. There is currently no
annual or lifetime maximum under the plan.
Sun Life is
making a lot of money off the CAAT Retiree Plan. Fact or myth?
Myth. The CAAT Retiree Plan is 100%
experience rated, and provides for refund accounting. This means that the rates
retirees pay for the plan are based on the experience of the benefit plan. If
the plan is fully funded and has taken in more premiums than it requires, it can
either hold, or reduce benefit rates the following benefit year. This is
evidenced by the fact that the CAAT Retiree Plan was able to either lower or
maintain the cost of almost all benefit lines in both the 2011/2012 and
2012/2013 benefit years.
Contrary to what you may have been told
Sun Life does not receive 14% to administer the benefit plan. Sun Life is
provided with a competitive retention fee to administer the benefit plan,
process claims, provide drug cards etc. provide electronic claiming and payments
and provide benefit information. You should know that whether you belong to the
CAAT Retiree Plan, or the RTO Plan, or another group retiree benefit plan, you
will be required to pay a 2% Insurance Premium Tax which is built into the
premium you pay. In addition, all insured group benefit plans are required to
remit the 8% Retail Sales Tax to the Ontario government (this will vary by
province – eg., in Quebec the RST is 9%).
We hope that the information above is
helpful in explaining why we believe it is important to promote the CAAT Retiree
Benefit Plan, and to avoid being seen to promote outside plans. In the end, this
benefits us all in retirement.
If you have any questions regarding
anything in this communication or benefits matters in general, please feel free
to contact a member of any of the Joint Insurance Committees or the Retiree
Donna Mese, CAAT Academic JIC –
Janice Hagan, CAAT Support JIC –
Joan Cunnington, CAAT Academic Retiree –
Sheila Hirsch, CAAT Support Retiree –