The message below was emailed to U-M faculty and staff from the Benefits Office on April 27, 2006, and letters were mailed to U-M retirees.

From: The Benefits Office
To: U-M Faculty and Staff Community
Subject: U-M Medical Plans for 2007

At the end of this year, the Blue Cross Blue Shield/United traditional plan will be eliminated from our spectrum of medical plans. The University remains committed to offering a choice of high-quality, comprehensive plans. Therefore, during Open Enrollment (October 9-20, 2006), benefits-eligible faculty and staff can continue to choose from among M-CARE HMO, Care Choices HMO, Health Alliance Plan, Comprehensive Major Medical, M-CARE POS, Blue Cross Blue Shield PPO, and M-CARE PPO PLUS. (GradCare continues to be available for eligible graduate
students.)

WHAT DO CURRENT BCBS TRADITIONAL PLAN MEMBERS NEED TO DO?
The Blue Cross Blue Shield/United traditional plan will continue in force through 2006 (members will have through the end of 2007 to file claims). Current members of the plan should select a new plan during this year's Open Enrollment period (October 9-20, 2006). Those benefit elections will become effective on January 1, 2007. Any faculty or staff member currently enrolled in the Blue Cross Blue Shield/United traditional plan who does not elect a new plan during Open Enrollment will be automatically enrolled in the Blue Cross Blue Shield Preferred Provider Organization (PPO) plan for the 2007 calendar year, and the next opportunity to change plans will be during the 2007 Open Enrollment period. Automatic enrollment protects BCBS traditional plan members from a lapse in coverage if they fail to elect a new plan before the end of Open Enrollment.

WHY MAKE THIS CHANGE?
Our mix of vendors and plan types are re-examined each year to determine what changes, if any, are needed to respond to market forces and changing enrollment patterns so we can continue to offer a choice of high-quality plans for active employees, their dependents and U-M retirees. Some of the key factors that greatly reduced our need for the traditional plans include:

• Plan portability -- One of the advantages of traditional plans is that they are portable, and allow access to physicians across the country rather than within an HMO service area. The addition of two PPO plans (M-CARE PPO PLUS and Blue Cross Blue Shield Community Blue PPO) in 2005 serves the need of non-area residents for nation-wide access to care without reliance on the older and more costly plan design of traditional coverage plans. The BCBS Comprehensive Major Medical (CMM) plan also offers flexibility in choosing providers but with greater out-of-pocket costs.
• Declining enrollment -- Since offering the new PPO plans, more than 40% of the traditional plan members have already chosen enrollment in a different U-M plan.
• Redundant access -- There is overlap of greater than 90% between physicians and hospitals in both the BCBS traditional plan and the BCBS Community Blue PPO plan that we now offer.
• Nationwide access -- BCBS reports that more than 90% of physicians nationwide, including specialists, accept the BCBS Community Blue PPO plan.
• Cost savings -- Switching from the traditional plan to the BCBS Community Blue PPO yields significant monthly savings in reduced premiums for most members.
• Enhanced coverage -- The BCBS traditional plan, as well as the CMM plan, have annual deductibles to be met. No other U-M plans have annual deductibles for drug coverage or office visits.

MORE INFORMATION

Questions and answers about this change area available at:
http://www.umich.edu/~benefits/new/bcbsmunited.htm

Open Enrollment information available this fall will continue to include plan comparison charts to show some of the key differences between plans as well as the monthly contribution amounts for each plan and coverage level. Premium amounts for 2007 will also be posted on the Benefits Office website by August 15.

No immediate action is needed, and all current U-M medical plans and enrollments will continue through December 31, 2006. Those employees currently enrolled in the BCBS/United traditional plans should review all of the plan options during Open Enrollment in October to choose plan that best meets their needs and the needs of their dependents. Regardless of the plan in which they are enrolled, faculty, staff and retirees should re-evaluate plan options during every Open Enrollment period to ensure that they choose the plan that best meets changing health needs and circumstances.

If you have questions, please feel free to speak with a benefits representative in the HR/Payroll Service Center at 5-2000 (Ann Arbor campus phones), 734-615-2000 (local calling) or 866-647-7657 (toll-free long-distance). Information on all U-M medical insurance plans is found on the Benefits Office website at:
http://www.umich.edu/~benefits/plans/medical/index.htm