STAR WATCH
Issue #3 February 26, 2004
Duffy is OK
A message from Duffy O'Brien on the outcome of her brain surgery: Thanks to everyone for all the prayers and support - it worked! My surgery was successfully completed two weeks ago and I spent one week in the hospital. I am now at my parents in the Philadelphia area, where I will stay for a while. I did need some of the blood which was donated for me and I am EXTREMELY grateful to all those who offered and gave. And someday I will figure out who originally had the weird cravings I just inherited!!!
Night at the Opera
Madame Butterfly The Night at the Opera will be a performance of Puccini's Madame Butterfly on Friday evening April 16. If you want to attend please call Mike Ryan at 203-698-0441 or Diane Herzman at 914779-4410, as soon as possible. Reservations are due by March 5.
In Memoriam
Johanna Delaney passed away on Monday, February 23rd in Ocean City, MD.
Save the Date
Our next luncheon will be on April 14 at the Stamford Yacht Club. Steve Vizner will update us on the important developments in our benefits discussed in this newsletter.
Medical Insurance Payments
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As you all know by now ChevronTexaco has changed it policy on medical payments to reducing the grace period from 60 days to 30 days as of January, 2004. At least one horror story is evolving from this change. One of our members has been told that the insurance is being terminated without being given any warning to provide a chance to review the matter and/or being given a chance to either make up a deficiency or challenge the correctness of the account. It cannot be overemphasized that each retiree or survivor of a retiree should do all they can to protect their benefits, including the following: 1. If you have not already done so, sign up for automatic payment to ADP. 2. Make sure that sufficient funds are in the account to cover the payment. 3. Check to see that the payment was made well before the end of the thirty-day grace period. ChevronTexaco and ADP have adopted a very hard line in dealing with this. While we will try to see what can be done to protect our members the best approach currently is to do what you can to see that the payment is made on time.
Refund for FICA/Medicare Taxes Paid on Severance Benefits
Please refer to the Tax Case ruling on our web site http://www.texacoretireesclubct.org/pages/benefits_taxrefund.htm which addresses the taxability of Involuntary Severance Benefits for FICA (Social Security and Medicare) purposes. Also refer to several entries on benefits page of the web site on this subject. On January 26, 2004 the IRS advised Lou Ruggio that they would be issuing a letter to him indicating that they agree with his Form 843 Refund of taxes paid on his behalf by ChevronTexaco. He hopes to receive the actual check within two months. He originally filed his request in May 2003 without assistance from ChevronTexaco. He is not sure what, if any, action the corporation has taken on behalf of ex-employees but elected to handle the issue on his own. Guidance for completing the 843 is on the web site, along with links to the IRS forms and instructions.
Benefits Corner: Health Savings Accounts
Health Savings Accounts The new Health Savings Accounts (HAS) offered by the federal government are similar to the old Flexible Savings Plan we had at work with two major exceptions; 1. Any unused money not spent in a given year can be rolled over to the next year. 2. You must have a high deductible medical insurance plan (minimum $1000 for a single individual, minimum $2000 for a couple or family).
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Each of you can deposit up your deductible, to a maximum of $2600 single or $5150 for a couple or family. This amount gets deducted off your income “above the line” similar to a traditional IRA contribution. You can then draw upon this money as medical expenses are incurred, including such things as dental and eyeglasses. If you have a long term health insurance policy, the HSAs can be used for the premiums for this policy. The new ChevronTexaco Option 3 seems to conform to the requirements for HSAs although some final confirmation of that will have to be made at some point in the near future. Versus Option 2, the $600 deductible per person, there is a premium savings of about $1600 per year. Add in the tax savings of $1250 (based on a couple contributing $5000 in the 25% marginal tax bracket) and there is a savings of about $2850 right away. Also state tax savings might further increase the benefits but that is not totally clear right now. However, be aware that all medical expenses are now paid for without any benefits from ChevronTexaco until the deductible is reached. For example, under Option 2 an office visit to a network provider incurred a $25 co pay where now you have to pay the entire charge until the deductible is met. Participation in HSAs end when a person turns 65 and is Medicare eligible. However, any money remaining the account at that time can be carried over to pay for medical expenses incurred after 65. As an example of how this might work for you, below are three cases for a couple comparing Option 2 with the new high deductible Option 3 with a Health Savings Account.
Total Yearly Expenses, Retiree Plus One Adult
Low Network Office Visits ($100 each) Physical Other Medical Dental, Eye, Drugs Total Benefit of HSAs over Option 2 500 0 400 820 1720 2435 Medium 900 800 3000 820 6520 335 High 900 900 51000 820 53620 (725)
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Interestingly, the stop loss feature helps to provide a limit on one’s exposure using the new high deductible plan. Even with very high medical expenses the extra cost of the high deduction plan is fairly low versus Option 2 whereas in a more modest expense profile the savings can be very substantial. If someone would like to play with the numbers further, please contact Steve Vizner (viznes@earthlink.net) and he will provide you with an Excel spreadsheet. For a good write up on this plan go to the IRS website (irs.gov) and search using the words “health savings plans”.
The Texaco Retirees Club of Connecticut
Skip Weverbergh, Rich Cofone, Kevin Ryan, Steve Groth, Ray Dively
The TRCC has approximately 200 Members. Membership dues of $10.00 are payable by June 20 and run from July 1 to June 30 of the following year. Upcoming Luncheons: Wed. April 14, 2004 Stamford Yacht Club (Stamford) Friday April 16 Night at the Opera Madame Butterfly Wed. July 14, 2004 Silvermine Tavern (Norwalk) October 13,2004 to be announced Wed Dec 15, 2004 Giovannis II
Up-to-date information on our activities and contacts information can be found on http://www.texacoretireesclubct.org/.
The Texaco Retirees Club of Connecticut C/O Kevin Ryan 25 Longview Drive Ridgefield, CT 06877