Dignity Health Retiree Medical Reimbursement Program

Transcription

1 Dignity Health Retiree Medical Reimbursement Program We are pleased to offer the Dignity Health Retiree Medical Reimbursement Program () designed to help you cover your future medical and healthcare costs during retirement. What is the? The Dignity Health is a tax-free program, providing you with dollars to use for reimbursement of your own medical and healthcare expenses during retirement. Your healthcare expenses can include items such as your medical plan premiums, hospital deductibles, physician co-pays, prescription drug costs, glasses and contact lenses, or other out-of-pocket healthcare expenses you might have. The is completely paid for by Dignity Health. Why the? Benefit costs are a major challenge for most employers and a concern for most employees as well. As you know, Dignity Health provides a comprehensive and highly competitive benefits package during your active employment. However, the cost of healthcare in your retirement years has emerged as a concern and that s why we have designed the. Dignity Health, like other employers, is concerned about the escalating costs for employee healthcare. At the same time, we have recognized how important it is for you to be able to plan for your retirement needs. Dignity Health remains committed to helping you provide for your financial security in retirement. Your Dignity Health retirement plan was implemented with that commitment in mind. To enhance your total retirement package, we offer the Dignity Health Retiree Medical Reimbursement Program, providing you with additional support for healthcare expenses in retirement and complementing your Dignity Health retirement program both designed to help you build a secure financial future and ultimately a successful retirement. Pension Income provided by Dignity Health Savings Plan Your before-tax contributions & Dignity Health matching dollars s provided by Dignity Health Total Retirement Package Page 1 Dignity Health 05/2016

2 Who s Eligible for the? Non-bargaining, benefits-eligible employees participating in a Dignity Health-sponsored retirement plan are eligible for the. To receive a benefit at retirement from the you must: Have 20 years of eligible service with a Dignity Health facility. A year of eligible service is one in which you have worked at least 1,000 hours in a benefits-eligible position and earned a year of Vesting Service under the Dignity Health Retirement Plan. Work at least 1,000 hours during the last five consecutive years prior to your retirement. Retire from a Dignity Health facility at age 62 or older and immediately begin to receive your benefits from a Dignity Health sponsored retirement plan. Once you retire, the funds are available to you based on your age: If you retire at age 65 you are eligible for reimbursement of the full amount credited, or If you retire as early as age 62 you are eligible for reimbursement of an amount that is reduced five percent (5) per year for each year before age 65 that you begin retirement. How Does the Work? The is completely paid for by Dignity Health; there is no contribution required of you. When you retire from Dignity Health, your benefit will be calculated and you will be notified by letter of your account value and how to access your account. You may file claims with the for reimbursement of your own qualifying healthcare expenses. And, as a further benefit, the reimbursements from the are not considered taxable income; so, you are reimbursed for your healthcare expenses on a tax-free basis. For each year since the time of your facility s affiliation with Dignity Health that you have worked at least 1,000 hours in an eligible position, Dignity Health will credit the with a percentage of your pay as indicated in the chart below: Age as of January 1 Percent of Pay ed to 44 and under through and over 3.0 Note: For purposes of calculating your benefit value, Dignity Health will use your age and your pay for the years you have worked in an eligible position in a Dignity Health facility. That means your pay in each eligible year that you worked in a Dignity Health-affiliated facility up to and including your retirement year will be used to determine your Retiree Medical Reimbursement Program value, to a maximum of $35,000. Let s take a look on the next page at examples of how the might add up for you when you are ready to retire. Page 2 Dignity Health 05/2016

3 Mark, age 43, was recently hired by Dignity Health as a full-time, benefits-eligible employee. His salary is $40,000 per year. He will earn credits based on his age and salary for each year of service starting with his year of hire. Mark continues to work full time over the course of his career with Dignity Health and retires at age 65. He will earn an benefit of $35,000, which is then available to reimburse tax-free his future healthcare expenses at retirement. Age* Salary** $40,000 $800 $ , , ,849 1,071 2, ,443 1,813 16, ,260 $35,000 max ***Maximum amount is $35,000 If Mark decides to retire early, his accumulated benefit will be reduced 5 for each year he retires before age 65. If Mark retires at age 63, his accumulated benefit of $32,996 will be reduced to $29,696. These funds will be immediately available to reimburse tax-free his future healthcare expenses. Age* Salary** $40,000 $800 $ , , ,849 1,071 2, ,443 1,813 16, ,592 2,388 $32, $29,696**** ***Maximum amount is $35,000 ****Benefit reduced 5 for each year employee retires earlier than 65 Susan was hired at her hospital four years before it affiliated with Dignity Health. Susan works full time over the course of her 20-year career at the hospital and retires at age 65. In addition, her facility granted Vesting Service in the Retirement Plan prior to affiliation with Dignity Health. Susan will earn credits for the 16 years since affiliation. s are based on her age and salary for each year of service. Susan was age 49 at the time of affiliation and earned $54,000 that year. By age 65 Susan will have earned the maximum benefit of $35,000. This sum will be immediately available to reimburse tax-free her healthcare expenses in retirement. Age* Salary** $54,000 $1,350 $1, ,890 1,397 2, ,846 1,446 4, ,871 1,497 5, ,380 1,991 10, $35,000 ***Maximum amount is $35,000 Page 3 Dignity Health 05/2016

4 Frequently Asked Questions about the 1. Q: Is there a maximum amount that can be credited to the? A: The maximum amount that can be credited to the is $35, Q: Does my prior service with another Dignity Health facility count toward the 20 years of service requirement? A: Yes, if you were in an eligible position in any Dignity Health facility and earned a year of Vesting Service under the Dignity Health Retirement Plan, your past service is included for eligibility. 3. Q: When is my age determined for percent of pay credits? A: Age for percent of pay credits is determined as of January 1 of each year. 4. Q: What types of pay are used to determine credits? A: The recognizes all compensation included under the Dignity Health Retirement Plan when determining the percentage of pay credits. Basically, that means pay credits apply to your W-2 pay, pre-tax healthcare premiums, and pre-tax deferrals to a Dignity Health savings Plan. (Relocation expense reimbursement, severance, and any imputed income you may have are excluded.) 5. Q: Are partial years of service included for eligibility in the? A: Each full calendar year you work at least 1,000 hours in an eligible position will be included for purposes of meeting the 20-years of service eligibility requirement. The final year in which you retire will be counted if you have worked at least 1,000 hours before you retire from Dignity Health. 6. Q: How will I know the amount available for reimbursement from the? A: While you are actively working, you can easily calculate your percent of pay credits using the chart on page 2 of this newsletter. When you retire, you will be notified of the total amount available to you from the and how to access your account. 7. Q: If I retire before age 65, can I defer using to a later date? A: The is designed to reimburse your healthcare expenses when you retire. To be eligible for the benefit you must retire and begin to receive your benefits from the Dignity Health Retirement Plan at the earliest possible date following your retirement. You may request reimbursement for your healthcare expenses as they are incurred at any time during your retirement years. 8. Q: What types of expenses can be reimbursed by the? A: The will reimburse your out-of-pocket amounts amounts you paid for your own healthcare. The types of healthcare expenses eligible for reimbursement would be those typically covered by your current health plan. For example, physician office visits, inpatient and outpatient hospitalization, diagnostic tests, glasses and contact lenses, and prescription medications. In addition, premiums you pay for your own health plan coverage, such as Medicare Part B, after retiring from Dignity Health, are eligible for reimbursement from the. Page 4 Dignity Health 05/2016

5 9. Q: Will the reimburse healthcare expenses for my spouse or other dependents? A: No. The is designed to reimburse your own healthcare expenses after you retire from Dignity Health. 10. Q: Are reimbursements from the considered taxable income to me? A: No. Reimbursements from the are considered tax-free and do not become part of your taxable income. 11. Q: Can I request a lump sum payment from the when I retire? A: No. The reimburses you for your own out-of-pocket healthcare costs during retirement. After you have paid your healthcare provider, you should then file a claim for reimbursement from the. Typically, you will receive your reimbursement payment within a couple of weeks. You will receive information about filing claims for when you retire. 12. Q: What happens if I die before receiving the full reimbursement from the? A: Because is for your own healthcare expenses, no further reimbursement requests can be made after you die, except those made on your behalf for any end-of-life care that you received. Page 5 Dignity Health 05/2016