Open Enrollment Important Changes Outlined, Employee Paperwork Due May 15
By Rachel Voris
Most UA employees, about 70 percent, wait until the last two weeks of open enrollment to submit their updated paperwork to human resources. If you’re among that 70 percent, this information will be helpful. There are many changes to health care this year that require action on your part.
Important Changes to Note
Decreased rates: Rates have decreased from FY13. Last year’s rates included collection of the under recovery from the prior year. (For a complete history of under recovery at the UA, read here ). Over and under recovery have effected UA plans in recent years. FY12 was an under recovery year, and the university had to make a plan to recover $2.8 million of the shortfall the following fiscal year. There are many reasons behind this significant under recovery amount in FY12. What is most important is that the university was able to recapture the entire cost of under recovery in FY13, even though it was anticipated to collect only 80 percent. Plan costs are still increasing, but with the under recovery out of the way, most employees will pay less for coverage this year.
Dependents: UA has changed the way charges for dependents are calculated. Changing the charge structure reallocates the cost of coverage based on family size. In the old tier format, employees with dependents paid the same cost regardless of family size. The new tiers will have dependent charges for one child, two children and three or more children. Employees with three or more children will see their costs increase slightly in the coming year, while employees with only one child will see a decrease. Children overall still cost considerably less than adults on the plan.
- Action required: It is very important that employees complete an enrollment form to verify how many dependents you have. Proof of eligibility will be required when enrolling a new or returning dependent on the plan (birth certificate, adoption papers, marriage certificate, divorce decree).
Summary of Benefits and Coverage: New Summary of Benefits and Coverage (SBC) information packets have been issued, required by the Affordable Care Act. The idea of the SBC is to provide a straightforward snapshot of what the plan covers, and it allows you to compare what your costs would be for a couple of example situations like having a baby or managing diabetes. The law spells out the format and information required on the SBC- including example treatments and pricing- so that plans can be compared showing the same data nationwide. The SBCs for each plan can be found here.
Pharmacy Change: As a result of the request for proposal process started last year, Premera will stay as the provider for medical and dental and will now also offer pharmacy benefits, effective July 1. One ID card will be issued for medical, dental and pharmacy benefits. Premera partners with Express Scripts for retail, mail order and specialty pharmacy services. Having both medical and pharmacy together is important for the Consumer Driven Health Plan (CDHP) plan design because they both apply to the deductible.
Vision: As part of the RFP process started last year, the university will continue using VSP with an enhanced benefit for frames and contacts. As of July 1, the allowance will be increased to $150 every other plan year.
Nurse Line: UA and Premera will now offer a 24 hour Nurse Line. Starting July 1, you can call any time to get answers and advice on whether you should see the doctor or not, or call the line to see if you really should get to the emergency room or see a regular doctor. The service provides peace of mind, any time of the day. All calls to the NurseLine are free, confidential and available 24 hours a day, seven days a week. Call 1-800-841-8343.
Flexible Spending Accounts (FSA): Health Care FSAs will be limited to $2,500 for the maximum amount you can elect into the account. The amount of money an employee can put towards the FSA will be capped beginning in July 2013 due to provisions in the Affordable Care Act. The reduced amount that can be contributed to the flexible spending account allows more income to be taxed to help pay for health care reform mandates. Previously, the UA set the maximum FSA amount to $5,000. Click here for more details about FSAs.
Contributing to the FSA still offers many benefits if done correctly. The employee contributes a set amount to this account every pay period and in turn can be reimbursed for medical costs that are paid out of pocket, including deductibles, coinsurance, copays, vision needs, dental or other items not fully covered by the UA health plan. Employees can be reimbursed for the full elected amount even before that full amount has been contributed through bi-weekly pay periods. If an employee signed up for the FSA and were to have surgery a month after creating the account, the employee could use the full amount to pay their deductible and other out-of-pocket costs, even though that amount has not been completely contributed.
Be sure to use the amount in your health care FSA by June 30, 2014, because unused dollars will be forfeited. This is called the “Use It or Lose It” feature of the FSA.
The Dependent Care FSA has not been changed. Most employees with eligible dependents are still able to contribute up to $5,000 if married, filing jointly, or single head of household. This FSA is used to pay day care expenses.
New plan designs
Action required: The 500 Plan is no longer offered. If you are currently on the 500 Plan, you will be automatically moved to the 750 Plan unless you fill out the necessary forms
indicating another plan choice. The orthodontia benefit will be moved to the 750 Plan.
Consumer directed health plan with a health savings account: A new plan, the Consumer-Directed Health Plan (CDHP) with a health savings account is now offered. On this plan, the pharmacy benefit is subject to deductible and coinsurance (no copays—pay full price on medications until deductible is reached). The deductible is “aggregated,” which means if you cover more than just yourself on the plan, the family deductible applies. The out of pocket maximum is also aggregated. The plan still offers 100 percent coverage for preventive services, like all other plans, and this includes a preventive pharmacy benefit as well. Click here for more information on the CDHP. Click here for a list of preventative pharmacy benefits on the CDHP.
Action required: To sign up for the CDHP, go here to download all necessary forms and return them to human resources by May 15.
Health Savings Account Restrictions: A health savings account is a bank account with pre-tax money to pay for eligible health care expenses. Employees contribute to this account through payroll deductions or by making deposits into the HSA. The account can be used for current expenses or can be saved for later choices—even into retirement. The unused balance rolls over year to year. The account is portable and can be taken with you if you leave the UA.
There are restrictions on who can contribute to a HSA. In order to contribute, you must be covered by a qualifying high deductible health plan, like the CDHP. You cannot have any other insurance that is not a qualifying high deductible health plan, meaning no Tricare, no Medicare, no AlaskaCare or coverage from a spouse’s plan. If you have a HSA, you cannot also have a Flexible Spending Account or a spouse who has an FSA. You also cannot be claimed as a dependent on anyone’s taxes. A financially interdependent partner (FIP) is not allowed to use the funds contributed to this account.
Bank of America will administer the health savings accounts and will distribute a welcome kit and debit card for those who sign up. The debit card can be used to pay for services or account holders can pay for medical needs through a different account and reimburse themselves from their account at Bank of America. The account will include online bill-pay. Employees must keep documentation for all claims and reimbursement and then file Form 8889 with your tax return annually.
Housekeeping Details During Open Enrollment
During open enrollment, it is always important to make sure your beneficiaries for life insurance and retirement plans are up to date. Since the plan designs are significantly changing, verify current coverage and enrolled dependents on UAonline. If you need to change your “HR” address, this can only be done with the “Change Form,” available here .
Remember to register at Premera.com—all you need is your ID card. When you register, you can find in-network doctors in your area, all of Alaska or any other state. You will also have access to pharmacy preferred drug lists, benefit information, claims information and spending activity reports. Premera also offers a mobile app available for download.