Ready, Set, Enroll! Take Action For Benefits

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Sharleen Anthony
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Ready, Set, Enroll! Take Action For Benefits KEY CHANGES FOR OPEN ENROLLMENT 1. Active Open Enrollment 2. Single sign-on for BenefitFocus through mybama 3.

1 Ready, Set, Enroll! Take Action For Benefits KEY CHANGES FOR OPEN ENROLLMENT 1. Active Open Enrollment 2. Single sign-on for BenefitFocus through mybama 3. Pharmacy Benefit changing to Prime Therapeutics 4. Medical Premium Tier Changes 5. New High Deductible Health Plan (HDHP) 6. New Health Savings Account (HSA) Open Enrollment is different this year! If you need medical, dental and vision insurance or a flexible spending account in 2019, keep reading. ACTIVE OPEN ENROLLMENT NOV NEW MEDICAL PLAN OPTION In previous years, UA conducted a passive open enrollment where you could retain your existing benefit coverages year after year without having to re-enroll. This is no longer the case! Every employee must act by electing or declining benefit coverages through BenefitFocus, regardless of current coverage choices. You will not have to re-verify current dependents. Only new dependents will require documentation be submitted during Open Enrollment. For the first time, UA employees will now have a CHOICE in medical plans with the introduction of a high-deductible health plan option! Active enrollment is necessary to facilitate the addition of this new plan. Active enrollment will also promote the variety of benefits offered and ensure UA continues to comply with Affordable Care Act requirements to offer coverage to at least 95% of full-time employees. OPEN ENROLLMENT IS YOUR OPPORTUNITY TO: Elect new medical, dental or vision coverage, change existing benefits, or decline coverage. Enroll in the HSA or renew your healthcare FSA and dependent care FSA contributions. Add or remove dependents. For more information, visit 1

2 Employees who fail to enroll in coverage by November 15 must wait until the next open enrollment period to elect coverage, unless a qualifying life event occurs. IRS regulations prohibit a change in coverage after open enrollment except within 30 days of a qualifying life event. By closely adhering to all IRS requirements, premiums for medical, dental, vision and FSA contributions qualify for pre-tax payroll deductions meaning you do not pay income tax on your contributions. Any enrollment exceptions without a qualifying life event could jeopardize UA s tax-favored status and cost all employees more money. Make sure you carefully choose medical, dental, vision insurance or flexible spending accounts that meet your needs and enroll by November 15, FINANCIAL STATUS OF HEALTH PLAN The University s self-funded health plan has operated at a deficit since UA has an overall ($14,661,120) loss based on actual losses from and projected losses for Cost drivers include catastrophic claimants with $100,000+ in medical and pharmacy claims per year, specialty prescription drugs, a lack of premium increases in 2012, 2013, 2015, and 2016, and overall inflation of 8% for medical and 10% for pharmacy. NEW HIGH DEDUCTIBLE HEALTH PLAN OPTION The University currently offers a Preferred Provider Organization (PPO) medical plan with Blue Cross and Blue Shield of Alabama. Effective January 1, 2019, UA will also offer a new qualified High Deductible Health Plan (HDHP) with a Health Savings Account (HSA). The new HDHP features lower premiums and a higher deductible. In other words, you will pay less in monthly premiums to maintain coverage, but you will pay more out-of-pocket when you seek medical care. Every employee or family must satisfy the higher deductible before the plan begins to pay. After the deductible is met, you will pay a 20% coinsurance based on the allowed or eligible charges. Once you reach the out-of-pocket maximum, the plan will pay 100% of the covered expenses for the remainder of the calendar year. WHAT IS THE DIFFERENCE BETWEEN THE CURRENT PPO AND THE NEW HDHP WITH HSA? The following chart highlights some of the differences between these two plans. Benefit Comparison (In-Network Covered Services) Monthly Premiums Employee Family without a Spouse 1 Family with a Spouse 1 Medical Deductible Prescription Drug Deductible UA Contributions to HSA Medical Out-of-Pocket Max Pharmacy Out-of-Pocket Max HDHP with HSA $54 $193 $224 PPO Plan $108 $386 $447 $1,400 Per Person $175 Per Person $2,800 Per Family 1 $175 Per Person $400 Employee Only $800 Family $3,000 Per Person $6,000 Per Family 1 Not Applicable $2,500 Per Person $7,150 Per Family $2,500 Per Person $7,150 Per Family Plan Payment Coinsurance after deductible Copayment after deductible Covered Services PPO Physicians & Facilities Preventive Care Covered services are the same for both plans Preferred providers & facilities are the same for both plans Routine screenings and preventive care covered at 100% for both plans (no deductible). For a comprehensive list of services, visit 1 According to IRS regulations, any non-single contract is considered a family contract for purposes of deductibles, out-of-pocket maximums, and contributions. For more information, visit 2

3 Benefit Comparison HDHP with HSA PPO Plan Primary Care Physician Office Visit Specialist Physician Office Visit Outpatient facility charge for MRI, colonoscopy, endoscopy ER Medical Emergency Prescription Drugs You pay the full discounted network cost (i.e. eligible charge) until the deductible is met, then the plan pays 80% and you pay a 20% coinsurance. $35 copay after deductible $50 copay after deductible $125 copay after deductible $150 copay after deductible. Copay after deductible WHAT IS A HEALTH SAVINGS ACCOUNT? An HSA is a tax-advantaged medical savings account available only to individuals enrolled in a HDHP. HSAs are like individual savings accounts, but the money in the account is used to pay for qualified medical, dental and vision expenses. It can also help you save for future medical expenses. Key benefits: Triple Tax Savings: 1. Tax free payroll contributions from employee and The University of Alabama. 2. Tax free earnings accumulate, if invested. 3. Tax free distributions, if used for qualified medical expenses. Retirement Savings Tool: Once you meet a $2,000 minimum balance, HSAs offer IRA-like investments including annuities, CDs, stocks, bonds, mutual funds, etc. After age 55, you can contribute an additional $1,000 per year to your HSA. After age 65, you can use your HSA money to pay for Medicare Part A or B premiums and long-term care. Employee Ownership: You own the money in your HSA account, even if you leave UA or switch to the PPO plan in the future. You can increase, decrease or stop contributions at any time. You also control how and when your money is spent. WHAT IS THE DIFFERENCE BETWEEN AN HSA AND A HEALTHCARE FSA? The following chart highlights some of the differences between these two tax-favored accounts: HSA Healthcare FSA Required Insurance High Deductible Health Plan Traditional PPO Account Type Saving Spending Ownership You! The Employee The University of Alabama Funds Available Funded per paycheck Beginning of the year End of Year Balance Indefinite Carryover Expenses must be incurred after HSA is effective, but money can be disbursed in later years. Use it or lose it Rule Expenses must be incurred within the plan year and reimbursed by March 31 of the following year. Portability Yes No For more information, visit 3

4 HSA EMPLOYER CONTRIBUTIONS In 2019, The University of Alabama will contribute up-front seed money to your HSA: Employee Only Family without a Spouse Family with a Spouse Tier UA Seed Money Contribution $400 per year $800 per year $800 per year HSA EMPLOYEE CONTRIBUTIONS The IRS has established annual pre-tax contribution limits (a combination of both employee and UA contributions). Employee Only The annual contribution limit is a combination of both employee and UA contributions: Family Annual HSA Contribution Limit $3,500 $7,000 UA SEED MONEY + EMPLOYEE CONTRIBUTION = ANNUAL LIMIT Employee Only $400 + $3,100 = $3,500 Family $800 + $6,200 = $7,000 Unlike the healthcare FSA or dependent care FSA, you can change your HSA monthly deduction throughout the year and contribute up to these annual limits. In addition to the annual contribution limits, the IRS has established a general monthly contribution rule. For each month you are HSA-eligible, you may contribute one-twelfth of the applicable maximum contribution limit. For example, the family annual contribution limit is $7,000 in 2019 so you could contribute a maximum of $ per month ($6,200/12) via payroll deduction. You may also contribute additional funds directly to TASC at IRS ELIGIBILITY RULES FOR HSA Due to the favorable triple tax advantage, the IRS has strict guidelines for who qualifies to make contributions to an HSA account. The HSA is an individual account, so it is your responsibility to ensure you are eligible to participate in an HSA and make tax-favored contributions. If your situation changes at any time, for any reason, you are personally liable for ensuring you take the necessary steps to maintain compliance with IRS rules. The requirements to contribute to an HSA include, but are not limited to: You must be enrolled in a qualified High Deductible Health Plan (HDHP). You cannot be covered by any other non-hdhp, even if the coverage is secondary. Example: You cannot be covered secondary on a spouse s PPO plan. Example: You cannot be enrolled in Medicare Part A or B, or TRICARE. Example: You cannot be eligible for and have received health benefits or prescription drugs from the VA in the last three months, unless for a service-connected disability. You cannot be listed as a dependent on another person s tax return. You cannot use your HSA to pay for ineligible dependents. Affordable Care Act (ACA) allows children to remain on a parent s plan until age 26. However, IRS only considers child dependents up to age 24, if a full-time student. You or your spouse cannot be enrolled in a healthcare Flexible Spending Account (FSA) or Health Reimbursement Account (HRA) in the same year. This restriction does not apply to Dependent Care FSAs for childcare expenses. For more information, visit 4

5 DENTAL AND VISION RATES NO INCREASES DENTAL VISION Tiers Employee Only $28.09 $28.09 $5.74 $5.74 Employee + 1 $55.04 $55.04 $10.59 $10.59 Family $79.75 $79.75 $18.52 $18.52 FLEXIBLE SPENDING ACCOUNTS Account Healthcare FSA Dependent Care FSA Annual Contribution Limit $2,650 $5,000 Minimum Contribution $125 $125 Eligible Expenses Pay for out-of-pocket healthcare expenses that are not covered by medical, dental or vision insurance for you & your tax dependents Pay for childcare expenses for tax-dependent children under the age of 13 Funds Available Beginning of the year Funded per paycheck Under both FSA accounts, you can pay expenses via debit card or manual reimbursement requests directly to TASC. Both accounts are also subject to the use-it-or-lose-it rule. This means you must incur expenses by December 31, 2019 and submit all claims for reimbursement by March 31, 2020 or forfeit any remaining funds in the account. PREMIUM TIER CHANGE The change from Employee Only, Employee + 1 and Family to the new tiers will standardize premiums across The University of Alabama system. The new tiers also align better with the High Deductible Health Plan and Health Savings Account because IRS regulations treat any non-single contract as a family contract. PPO MEDICAL PLAN PREMIUMS Tier Monthly Biweekly Employee Only $95 - $ Employee + 1 $340 - $ Family $371 - $ Employee Only - $108 - $ Family without a Spouse - $386 - $ Family with a Spouse - $447 - $ For more information, visit 5

6 OTHER PPO PLAN DESIGN CHANGES First Dollar Deductible Beginning in January 2019, each individual will be subject to the $175 medical and $175 Rx deductible under the PPO plan ($350 per person). This will eliminate the maximum 3 per family rule. For example, a family of four could pay up to $350 x 4 = $1,400 in deductibles. Emergency Room Facility Copay The copay will increase from $125 to $150 per visit. Specialist Office Visit Copay The copay will increase from $40 to $50 per visit. Annual Physical Therapy Limits Physical therapy will be limited to 20 visits per person per calendar year to match current limitations for speech and occupational therapy. Out-of-Network Services in Alabama The employee s coinsurance will increase from 40% to 50% if they use an out-of-network provider located in the state of Alabama. This will have minimal impact in Alabama due to Blue Cross and Blue Shield s expansive provider network. No out-of-state impact. REPLACING SALARY TIERS WITH PREMIUM ASSISTANCE PROGRAM The University will eliminate the medical premium salary tiers in 2019 and replace them with the new Premium Assistance Program. Overall, premium assistance has the potential to positively impact more employees and provide financial assistance to those employees who truly need it based on family size and income. PREMIUM ASSISTANCE PROGRAM UA will provide premium assistance to eligible active employees by giving a medical premium discount based on (1) family size and (2) total combined household income set at 1.5x the Federal Poverty Level. To apply for this discount, visit Eligible employees must submit the Premium Assistance Application and a copy of their most recently filed Federal Income Tax Return, W-2s and 1099s to verify total annual household income. Application Deadlines: Current Employees Submit documentation annually during Open Enrollment. Newly Eligible Employees 30 days from the effective date of enrollment in health plan. For 2019, the discounted amount is $54 per month (up to $648 per year). The discount is equal to the lowest employee-only premium available (see page 2). After receipt and approval of the application, the premium discount will be effective based on the medical plan effective date and will be reflected in the first available paycheck. The discount only applies to medical plan enrollment and is for the current plan year only. Employees must reapply each plan year. Instructions to apply are posted on the Open Enrollment website. Estimate your eligibility for the discount using the federal poverty level table to the right: 2019 UA Premium Assistance Chart Family Size Annual Household Income 1 $18,210 2 $24,690 3 $31,170 4 $37,650 5 $44,130 6 $50,610 7 $57,090 8 $63,570 The new Premium Assistance Program offers a $54 monthly discount which is greater than the current salary tier differentials as illustrated in the chart below: Current Tiers Salary < $26k Salary $26k Current Premium Discount Employee Only $72 $95 $23 per month Employee + 1 $287 $340 $53 per month Family $318 $371 $53 per month For more information, visit 6

7 PHARMACY BENEFIT MANAGER CHANGE The University of Alabama will return to Prime Therapeutics as our pharmacy benefit management company. This change will better serve our employees with improved customer service, including: 1. One ID card for both medical and pharmacy benefits. 2. One source for all mailed communications. 3. One number to call for 24/7/365 access to Member Services. 4. Single sign-on at mybluecross website for access to medical and pharmacy claims, drug cost comparison tools, and formulary information. 5. Seamless integration between medical and pharmacy claims which is critical because the new High Deductible Health Plan (HDHP) requires real-time accumulation of claims data for both deductibles and out-of-pocket maximums. NEW ID CARDS All employees will receive new ID cards from Blue Cross and Blue Shield of Alabama before January 1, 2019 because of the return to Prime Therapeutics. New cards will be mailed in December, so please verify your mailing address is correct in mybama during Open Enrollment. Discard your old ID cards for BCBS medical and OptumRx pharmacy after January 1. BENEFITFOCUS UPDATES Beginning in fall 2018, BenefitFocus will be accessible via single sign-on through mybama. You will still be able to access BenefitFocus directly through the app or website at but your mybama username and password will replace your current login information. This service enhancement should simplify the benefits enrollment process. It is strongly recommended you log in to BenefitFocus early, before Open Enrollment begins, to familiarize yourself with the online portal and review your current benefits and dependent documentation. Take charge of your benefits by taking action in BenefitFocus! Open Enrollment is November 1 15, For more information, contact the HR Service Center at For more information, visit 7

Open Enrollment. November 1-15, 2018

Open Enrollment. November 1-15, 2018 Open Enrollment November 1-15, 2018 Active Open Enrollment Health Plan Financial Status Dental & Vision Premiums High Deductible Health Plan (HDHP) Health Savings Account PPO Plan Design Changes Flexible