One of the biggest concerns for Americans nearing retirement is if they will be able to maintain their standard of living in retirement. A significant part of that worry is affording health care. However, there’s great news on that front for Chevron employees! Chevron’s Retiree Medical Benefits provide a number of options to ensure you have the benefits to keep you covered.
Retiree Medical has a lot of moving parts and can be challenging to understand. So, let’s dive in and explore everything you need to know about how the benefits work, which plan is right for you, and what financial planning you should do to optimize your benefits.
Chevron’s Medical Benefits in Retirement
Eligibility
If you are at least 50 years old with 10 or more years of service, then you have met the key requirements for Chevron's retiree health benefits. However, you must meet all the criteria below to be eligible:
- You’re age 50 or older
- You have 10 or more years of health and welfare service
- Your last rehire date must have been at least five years before you retired
- You are not a member of a union or group that was ineligible for retiree coverage
Costs
While you’re employed by the company, Chevron covers 100% of the company's medical contribution, and you are only responsible for the employee portion of the contribution. The difference in retirement is that Chevron will cover a percentage of the company contribution based on the number of points you have at the time of your retirement.
Number of Points = Age at Retirement + Years of Service
The amount Chevron contributes is based on a 90-point scale. Chevron employees who were retiree eligible prior to December of 2004 are grandfathered into the former 80-point scale. All the following information will be based on the 90-point scale.
| Age Plus Years of Health & Welfare Eligibility Service Points | Company Contribution Under the: | |
| 80-Point Scale | 90-Point Scale | |
| 60 | 50% | 50% |
| 65 | 62.5% | 55% |
| 70 | 75% | 60% |
| 75 | 87.5% | 65% |
| 80 | 100% | 75% |
| 85 | - | 85% |
| 89 | - | 97% |
| 90 | - | 100% |
Chevron's Contribution to Retiree Medical Benefits
Let's consider an example to see how Chevron would calculate its contribution to medical costs under the 90-point scale.
Suppose Julie has 75 points (age 55 with 20 years of service). She decides to retire from Chevron, which means she would be eligible for 65% proration of the company contribution for retiree medical coverage.
To be eligible for 100% of the company contribution to retiree medical coverage, Julie would need to remain an eligible employee until she is 63 (age 63 plus 28 years of service equals 90 points).
Let's consider another common example scenario.
Bruce has 69 points (49 years old plus 20 years of service). However, he is not eligible for retiree health benefits because he doesn’t meet the eligibility requirements of 50 years old with at least 10 years of service.
If Bruce waits one more year to leave Chevron, he would have 71 points (50 years old plus 21 years of service). This means he would be eligible for a 61% proration of the company contribution for retiree medical coverage.
Options Beyond Chevron's Retiree Health Benefits
If you aren't eligible under Chevron's 90-point scale for medical benefits in retirement, have no fear. There are other options available to you to consider.
COBRA, Subsidized by Chevron
Chevron-subsidized COBRA continuation coverage allows eligible employees and their covered dependents to continue participation in company-sponsored health care plans beyond the time when it would normally end, such as with a termination of employment.
COBRA coverage is typically available for up to 18 months. But, In some cases, like disability or subsequent qualifying events, coverage may be available for up to 29 or 36 months.
How Much Does COBRA Cost?
The cost for COBRA coverage is 102% of the total group cost. The total group cost includes both of the following:
- The employee contribution (i.e., the same amount an active employee pays)
- The company contribution
Let’s look at a hypothetical example: Edmund decides to leave Chevron to pursue his passion of extreme mountaineering. He was 36 at the time of his departure with 10 years of service, which means he didn’t meet all the eligibility requirements for Chevron's retiree health insurance. So, Edmund decides to enroll in COBRA Continuation of Benefits.
Given the nature of his hobbies, Edmund enrolls in the Medical PPO Plan. His monthly premium is $344, and the company premium is $1,400.
Under COBRA, Edmund’s total monthly premium is $1,784 ($344 + $1,400) + 2% administrative premium.
Affordable Care Act
If COBRA coverage is not a viable option. You can explore coverage on the open market through your state’s Affordable Care Act marketplace.
Chevron Retiree Health Insurance Plans for Pre-65 Retirees
Chevron offers four medical plans for retirees younger than 65.
- Medical PPO Plan
- High Deductible Health Plan (HDHP)
- High Deductible Health Plan Basic (HDHP Basic)
- Medical HMO Plan
There are three costs to keep in mind when selecting which plan is best for you. The costs will vary based on your medical plan and coverage type (e.g., You Only, You and Family, etc.).
- Monthly Premiums
- Deductible
- Max Out-of-Pocket Costs
|
You + Family (Medical)
|
||||
|
|
HMO
|
PPO
|
HDHP
|
HDHP Basic
|
|
Monthly Premiums*
|
Varies
|
$344
|
$74
|
$23
|
|
Deductible
|
Varies by Plan
Most common option is $600 |
$3,000
|
$6,000
|
$10,000
|
|
Out-of-Pocket Maximum
|
$5,000
|
$10,000
|
$10,000
|
$13,100
|
*Chevron provides exact premium amounts, and premiums are subject to change at the company’s discretion
How to Pick the Right Retiree Health Insurance Plan For You
The two primary considerations when determining which plan is right for you are 1) your health situation and 2) the plan cost.
Primary Concern: Costs
If you are in relatively good health and want to keep your monthly premium as low as possible, the HDHP/HDHP Basic could be the best fit. But it’s important to understand that a higher deductible is the tradeoff for a lower monthly premium. The HDHP Basic plan is the lowest premium medical plan, but it has the highest deductible.
If you enroll in the HDHP, you may also be eligible to open and contribute to a health savings account (HSA), as long as you are not enrolled in Medicare. However, this may not be very beneficial in retirement unless you have earned income.
Learn more about Chevron's Health Benefit Plans here >>
Primary Concern: Ongoing Illness or Health Issue
The PPO may be the most appropriate option if you visit the doctor more frequently due to an ongoing or chronic illness. With a lower deductible, your coinsurance would be triggered sooner. Keep in mind that higher monthly premiums are the tradeoff for a lower deductible.
Do I need to find a new doctor if I switch medical plans?
You may continue to use any provider you choose, network or out-of-network, under the Medical PPO Plan, HDHP, or HDHP Basic. This means you aren’t required to find a new provider if you switch plans.
Chevron Retiree Health Insurance Plans for Post-65 Retirees
The process of enrolling in medical insurance post-65 is slightly different as it combines coverage from the company's health insurance plans with Medicare.
How to Combine Company Health Insurance Plans With Medicare
Chevron partners with Towers Watson OneExchange to provide access to their private Medicare Exchange. This private exchange allows post-65 eligible retirees to shop for an individual Medicare plan that best fits their medical needs. You must be enrolled in Medicare Part A and B to participate in OneExchange’s individual health coverage.
Plan additions to Medicare Part A and B:
- Medicare Advantage
- Medicare Supplement (Medigap)
- Prescription Drug (Part D)
- Dental and Vision
Medicare Advantage is part C of Medicare and is only issued by private insurance carriers approved by Medicare. Those carriers usually bundle Medicare Part A, B, and C benefits.
Medicare Supplemental Insurance, commonly referred to as Medigap, is designed to fill in the “gaps” of your Medicare Part A and B insurance coverage. Original Medicare will pay for some but not all of your medical bills, and Medicare Supplemental is designed to cover any needs that Medicare doesn’t.
Determining Contributions for Post-65 Retiree Medical Plans from Chevron
Much like the pre-65 programs from Chevron, premiums after age 65 are still determined by how many points you have at retirement. However, instead of Chevron directly paying for their portion of the premiums, they reimburse you for them via the Health Reimbursement Account (HRA).
Since the Chevron HRA is a reimbursement account, that means you pay the medical premiums for coverage out-of-pocket to your insurance carrier. Then, you can submit a claim to Towers Watson OneExchange to receive reimbursement from your Health Reimbursement Arrangement account.
How Premiums Are Determined for Mixed Pre-65 and Post-65 Families?
If your family includes pre-65 and post-65 eligible participants, company contributions are determined based on age. Pre-65 eligible participants will receive a premium reduction, while post-65 participants will receive reimbursement via TowersWatson Exchange.
Let's consider another example, this time with John, a post-65 retiree with pre-65 dependents. John is currently 67 years old. He retired from Chevron with over 90 “age plus years of service” points. This means John is eligible for 100% of the company contribution amount to his retiree medical coverage. John met all eligibility and enrollment requirements, so his final company contribution amount is currently being applied to his Retiree HRA Plan account.
John’s spouse, Heike, is 55 years old. John’s son, Norbert, is 25 years old. Heike and Norbert are covered as John’s dependents in pre-65 retiree group medical coverage because both are under age 65. Chevron contributes to Heike and Norbert’s group medical coverage through monthly premium reduction instead of through a designated plan account.
What Happens to Your Medical Insurance When You Pass Away?
It’s important for families to consider how their medical insurance may change after the primary medical coverage recipient passes away.
Pre-65 & Post-65 survivors may continue coverage in their existing plans. However, survivors must report the death to the HR service center within 31 days of death. If survivors are on the Post-65 plan, they must report it to OneExchange.
Advisor Tip: It is essential to note that if the survivors miss the 31-day deadline, they will become permanently ineligible.
Do Medical Insurance Costs Change?
Per the Plan Summary, Chevron may pay a portion of the cost of survivor coverage. Contact the HR Service Center or OneExchange for information as it pertains to your specific situation.
How Long Does Survivor Medical Coverage Last?
Coverage lasts until the survivor dies or until the survivor reaches age 26 (unless incapacitated). Coverage is dependent on continual timely payments from the survivor.
Navigating Your Options After Retiring from Chevron
Chevron offers various plans and options for Chevron employees with special situations not discussed in this article. If you or a loved one has a unique medical situation and are unsure how to navigate your options from Chevron after retirement, contact our team to start the conversation. We've helped several Chevron professionals understand the options available to them and make the choices to transition into retirement effectively, and can help you do the same.
