Met Council Proposal: ATU Retiree Health Coverage (8/14/2026)

Article 35.5 Group Insurance – Retirees,
Section 3. Retiree Health Insurance Benefits

Upon reaching age 65, the medical plan option available is limited to an Employer-sponsored Medicare plan only. This requirement does not change a retiree’s eligibility for health benefits or applicable Employer contributions.

Medicare Advantage plan for the duration of this Agreement, except to the extent modifications are required by changes in federal Medicare law, regulation, or guidance, or as otherwise negotiated by the parties.

Note: The proposal focuses on retirees who are 65 are older and eligible to participate in Medicare. The intent is to limit future enrollment for those 65 and older to the Medicare only plans for the benefit of the retiree, the employer and current employees.

What is a Retiree under the Contract?

The current contract impacts less than 10% of ATU bargaining unit members and reads as follows:

Article 35.5 Group Insurance - Retirees Section

All employees must meet the following criteria to be eligible for retiree medical benefits:

1. be hired prior to April 17, 2004;
2. have a minimum of three (3) years consecutive full-time employment during the years immediately prior to retirement;
3. be at least 55 years of age; and
4. be eligible to receive an annuity.

In addition:

• Employees hired before October 27, 1995 must have a minimum of ten (10) full years of service with the employer to be eligible for retiree benefits.
• Employees hired after October 27, 1995 must have a minimum of fifteen (15) full years of service with the employer to be eligible for retiree insurance benefits.
• Employees hired after October 25, 2000, must complete seventeen (17) years of service to be eligible for retiree insurance benefits.

Years of service means: The number of years of continuous service from the first day of employment until retirement.

Article 35.5, Section 4(a) and 4(b)

What About All Other Retirees?

Minnesota Law Requires:

Employees who retire and qualify for a public pension (such as PERA or MSRS) must be allowed to stay on their employer's group health insurance plan (ie. Open Access, Distinctions or Empower HRA) after they retire until age 65 when they become eligible for Medicare, if they properly elect continued coverage and pay premiums.

For retirees, at age 65:

• Medicare becomes the primary insurance
• Most retirees also enroll in Medicare Part B

Together, these two plans already cover the majority of medical costs.

Maintaining the active employee health plan (ie: Open Access, Distinctions, or Empower HRA) on top creates overlapping coverage – not better coverage and results in extra unnecessary costs for retirees.

Note: At age 65, Medicare becomes a person’s primary coverage. And most retirees also choose Medicare Part B plan, which fills in the gaps Medicare doesn’t cover. Together, those two plans already provide very comprehensive protection. When someone also stays on the employer’s active employee plan, that brings in a third insurer—and instead of enhancing coverage, it often just creates complexity and duplication.

🏥 Part A – Hospital Insurance

• Covers hospital stays, skilled nursing, hospice, and some home health care.
• Think of it as insurance for when you're admitted to a hospital.

🩺 Part B – Medical Insurance

• Covers doctor visits, outpatient care, preventive services, lab work, and medical equipment.
• Think of it as insurance for everyday medical care.

📋Part C – Medicare Advantage

• An alternative to Original Medicare offered by private insurance companies.
• Enhanced plan that includes Parts A and B coverage, and often includes Part D plus extra benefits like dental, vision, or hearing.

💊 Part D – Prescription Drug Coverage

• Helps pay for prescription medications.
• Available as a standalone plan or included with many Medicare Advantage plans.

Medicare Part A (Hospital Insurance)

• Retirees are automatically enrolled at age 65 if they're already receiving Social Security.
• Retirees pay no premium because they paid Medicare taxes while working.

Medicare Part B (Medical Insurance)

• If you're receiving Social Security, you're automatically enrolled at age 65.
• If not, you must sign up yourself through Social Security.
• Part B requires a monthly premium.

Simple Takeaway

• Part A: Usually automatic and usually free.
• Part B: Automatic only if you're already on Social Security; otherwise, you must enroll and pay a monthly premium.

What It Means for the Retiree

Many retirees assume triple coverage = triple protection

In reality, they often end up with:

• Higher premiums for benefits they rarely use
• More claim complexity
• Coverage that has little left to pay after Medicare and Medicare Part B pay first.

Often, they’re paying for reassurance – not meaningful additional coverage.

Note: Most people understandably think that having multiple insurance plans must mean better protection. But health insurance isn’t like adding more blankets—it's more like paying three mechanics to fix the same truck. Once the problem is fixed, extra mechanics don’t add value. With insurance, the real question isn’t how many plans you have; it’s whether you’re paying for coverage you truly need.

In nearly all cases, Medicare + the Council’s Medicare Advantage provides:

• More comprehensive coverage
• Lower monthly premiums

Today: 

• An average Council retiree who qualifies under Article 35.5 pays about $378/month for non-Medicare single coverage vs. about $104/month for Medicare Advantage
• That’s over $270 in month savings – for better coverage.
• Some current retirees could save as much as $860 per month to cover themselves and their dependents.

Note: One of the biggest points here is that Medicare plus Medicare Advantage is actually the richer benefit. It typically provides more complete coverage than the active employee plan. And the cost difference is significant: retirees pay about $378 per month for the active Open Access plan, versus about $104 for Medicare coverage. That’s more than $270 of monthly savings, while receiving a plan that generally offers better protection.

Another consideration is Medicare Part B. About 65% of our retirees already pay for Part B. But for anyone who doesn’t, delaying enrollment beyond active coverage can cause a lifetime penalty—typically 10% for every full year delayed. Avoiding those penalties protects retirees financially long-term, and this proposal helps ensure they transition at the right time.

About 65% of ATU retirees that are enrolled in a non-Medicare plan who are Medicare eligible already pay for Medicare Part B.

Delaying enrollment in Medicare Part B coverage can result in a lifetime late enrollment penalty.

• The premium increases by 10% for every full 12-month period the individual could have had Part B but didn't enroll.
• Waiting two full years generally means paying 20% more for Part B.

Note: One of the biggest points here is that Medicare plus Medicare Advantage is actually the richer benefit. It typically provides more complete coverage than the active employee plan. And the cost difference is significant: retirees pay about $378 per month for the active Open Access plan, versus about $104 for Medicare coverage. That’s more than $270 of monthly savings, while receiving a plan that generally offers better protection.

Another consideration is Medicare Part B. About 65% of our retirees already pay for Part B. But for anyone who doesn’t, delaying enrollment beyond active coverage can cause a lifetime penalty—typically 10% for every full year delayed. Avoiding those penalties protects retirees financially long-term, and this proposal helps ensure they transition at the right time.

Features of the Council’s Medicare Advantage Plans

Examples:

• There are currently 26 ATU retirees or their dependents over age 65 and participating in the active employee health plan
• All current retirees can stay on their current plan– no plan changes for them
• Dependents under age 65 stay on the active plan until the reach Medicare eligibility – They don’t have to transition until they are Medicare eligible.
• Nearly 65% of ATU retirees who are enrolled in a Non-Medicare plan, already have both Medicare Part A and Medicare Part B.

Note: Putting this proposal into perspective. The group affected is very small—fewer than 30 current retirees—and every one of them would be grandfathered, meaning nothing changes for their coverage. Less than 10% of ATU members are even eligible, because the benefit only applies to employees hired before April 17, 2004. And it’s important to emphasize that dependents under age 65 stay on the active plan until they reach Medicare eligibility. The retiree and dependent don’t have to transition at the same time.

• Health insurance is a shared pool – When the plan pays for coverage that adds little value, premiums increase for everyone.
• To help keep costs down for everyone, enrolling in Medicare when eligible helps ensure our plans stay healthy.

Note: Health insurance operates like a shared pool. When that pool pays for coverage that doesn’t add value because Medicare is already covering the bills, the entire plan becomes more expensive. Employees want strong benefits and lower premiums—and reducing unnecessary costs supports both.

Article 35.5 Group Insurance – Retirees Section 3. Retiree Health Insurance Benefits

"Upon reaching age 65, the medical plan option available is limited to an Employer-sponsored Medicare plan only. This requirement does not change a retiree's eligibility for retiree health benefits or applicable Employer contributions. The Employer will preserve the total value of the Medicare Advantage plan for the duration of this Agreement, except to the extent modifications are required by changes in federal Medicare law, regulation, or guidance, or as otherwise negotiated by the parties."

What the Proposal Does:

• Preserves all current retirees
• Protects dependents under 65
• Reduces retiree premium costs
• Moves retirees to richer benefit after age 65 with the Medicare Advantage
• Helps control plan costs, including for active employees
• Aligns retirees with coverage most already choose

Note: When you look at the total picture, this proposal aligns future retirees with the coverage most already choose, preserves all current retirees through grandfathering, protects younger dependents, and transitions retirees into a plan that is richer, significantly less expensive, and designed for people over age 65. At the same time, it helps control total plan costs—supporting lower premiums for active employees.”

Medicare Advantage is for retirees enrolled in Medicare Parts A and B.

Open Access is for active employees and their dependents who are not on Medicare.

Medicare Advantage

• No medical deductible
• Low copays for most care
• $0 hospital stays
• Same cost for in- or out-of-network providers who accept Medicare and the plan
• Includes added dental, vision, hearing, fitness, transportation and meal benefits

Open Access

• No deductible for in-network care
• Most in-network visits are $10
• Lower out-of-pocket maximum in-network
• Higher costs for out-of-network care
• Includes vision, hearing and chronic-condition support programs

View the side-by-side comparison

The OPEB (Other Post-Employment Benefits) fund protects long-term retiree health benefits, while moving Medicare-eligible retirees to Medicare Advantage, can preserve those benefits at a much lower cost to both retirees and the fund.

• OPEB is the Metropolitan Council’s fund for paying retiree health benefits, primarily for eligible employees hired before 2004.
• The fund supports nearly 7,000 people, including current retirees, spouses and employees who may qualify in the future.
• The fund became fully funded in 2020, meaning money has been set aside to cover long-term retiree medical obligations.
• Moving to Medicare Advantage at age 65 can significantly reduce costs for retirees. An employee who starts working for Metro Transit at age 18 and retires at age 55, is projected to save about $150,000 over their lifetime, while the OPEB fund saves approximately $1.9 million compared with staying on Open Access.
• Other examples show estimated retiree savings of roughly $70,000–$85,000, reinforcing that Medicare Advantage can substantially reduce what retirees pay for coverage.
• Those dollars in the fund are projected to pay retiree benefits through 2080–2084 and are reserved for future medical costs.