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 Spending Accounts Premium Assistance PPO Premiums Health Plan Comparisons (PPO vs. HDHP) Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 2
Active Open Enrollment All benefit-eligible employees who currently have health, dental, vision insurance or flexible spending accounts must ACTIVELY participate in Open Enrollment. Why? Addition of the new high-deductible plan choice. ACA requires offer of coverage to 95% of eligible employees. What can you do during Open Enrollment? Add or change existing insurance coverage. Enroll in healthcare FSA, dependent care FSA, or HSA. Add or remove dependents. You must take action to enroll or re-enroll in health, dental, vision insurance or flexible spending accounts, or you and your dependents will have NO COVERAGE in 2019! 3
Health Plan Financial Status Projected Projected Calendar Year 2014 2015 2016* 2017* 2018** 2019 Total Revenues $37,144,541 $38,150,762 $42,935,247 $48,142,627 $49,398,936 $50,486,393 Total Paid Health Costs $35,516,273 $40,254,825 $45,993,080 $49,686,696 $50,457,312 $57,383,173 Difference $1,628,268 -$2,104,063 -$3,057,833 -$1,544,069 -$1,058,376 -$6,896,779 * UA contributed an extra $2 Million in 2016 and an extra $1.2 Million in 2017 to help keep the BC Reserve Fund solvent. ** 17% avg. premium increase for EE s was implemented for 2018, after a 10% rate increase in 2017. Bottom Line Based on our actual losses from 2015-2017 and our projected losses for 2018-2019, UA has an overall ($14,661,120) loss. 4
Cost Drivers UA s self-funded health plan has an overall ($14,661,120) loss since 2015. Catastrophic Claimants At least one $1,000,000 member each year. 30+ individuals with over $100,000+ claims each year. Specialty Prescription Drugs Harvoni - $90,000 per 12-weeks Humira - $4,800 - $6,400 per month Gilenya - $7,700 per month No premium increases from 2012, 2013, 2015, and 2016. Overall Inflation - 8% medical, 10% Rx 5
Dental Premiums Tier 2018 2019 Employee $28.09 $28.09 Employee + 1 $55.04 $55.04 Family $79.75 $79.75 Vision Premiums Tier 2018 2019 Employee $5.74 $5.74 Employee + 1 $10.59 $10.59 Family $18.52 $18.52 Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 6
We used to have passive enrollment. You could keep your current benefits without logging in to BenefitFocus. THIS YEAR IS DIFFERENT! You must ACTIVELY participate in Open Enrollment. Select your health, dental, vision coverage & flexible spending accounts, or NO COVERAGE in 2019! 7
What is a High Deductible Health Plan (HDHP)? Health Plan HDHP High Deductible Health Plan PPO Preferred Provider Organization Premiums Lower Higher Deductibles Higher Lower Member Cost Share (after deductible is met) Tax-Favored Accounts Coverage Effective Coinsurance (20%) Health Savings Account (HSA) Dependent Care FSA First of the month following date of hire Copayments Healthcare FSA Dependent Care FSA Date of Hire or First of the month following Third Party Administrator Network Access Covered Services Preventive Services Both plans are administered by Blue Cross & Blue Shield of Alabama. Both plans have the same network access and provider discounts. Both plans have the same covered services. Both plans cover FREE preventive services at no cost share to the member. Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 8
By the Numbers HDHP vs. PPO Premium HDHP PPO Employee $54 $108 Family without a Spouse* $193 $386 Family with a Spouse* $224 $447 First-Dollar Deductible HDHP** PPO Employee $1,400 $350 ($175 Medical + $175 Rx) Family without a Spouse* $2,800 per family $350 per person Family with a Spouse* $2,800 per family $350 per person Out-of-Pocket Maximum HDHP** PPO Employee $3,000 $5,000 ($2,500 Med + $2,500 Rx) Family without a Spouse* $6,000 $10,000 ($5,000 Med + $5,000 Rx) Family with a Spouse* $6,000 $14,300 ($7,150 Med + $7,150 Rx) * The IRS treats any non-single contract as a family contract for deductibles and out-of-pocket maximums. ** Medical and Rx deductibles and out-of-pocket maximums are combined for the HDHP. 9
Health Savings Account (HSA) vs. Healthcare FSA HSA is designed to be a consumerism tool. It is a savings account owned by YOU, the employee. It is your money to manage! HSA Healthcare FSA Required Insurance High Deductible Health Plan Traditional PPO Account Type Savings Spending Ownership You! The Employee The University of Alabama Contribution Limits $3,500 Employee $7,000 Family $2,650 Funds Available Funded per paycheck Beginning of the year End of Year Balance Indefinite Carryover Expenses must be incurred after HSA is open, 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 Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 10
Health Savings Account Benefits Tax-favored savings account for qualified medical expenses. (IRS Pub. 502) Account is administered by Total Administrative Services Corp. (TASC). Triple Tax Savings 1. Tax free payroll contributions from employee and The University. 2. Tax free earnings accumulate, if invested. 3. Tax free distributions, if used for qualified medical expenses. Retirement Savings Tool IRA-like investments including annuities, CDs, stocks, mutual funds, etc. Age 55+ can contribute an additional $1,000 to HSA each year. After age 65, can no longer contribute to HSA if enrolled in Medicare but can use HSA funds to pay for Medicare premiums or long-term care. Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 11
HSA Contributions Employee HSA contributions are tax-free via payroll deductions. Unlike the FSA, you can change this monthly deduction throughout the year and contribute up to the following annual limits: Account Employee Only Family* Annual Contribution Limit $3,500 $7,000 * The IRS treats any non-single contract as a family contract for deductibles, out-of-pocket maximums, and contributions. In 2019, The University of Alabama will also contribute to your HSA. You must enroll and open your HSA account to receive this money! It is not automatic. Tier Employee Only Family without a Spouse Family with a Spouse UA Seed Money Contribution $400 per year $800 per year $800 per year 12
IRS Eligibility Rules for HSA In order to contribute to a Health Savings Account You must be covered by UA s qualifying HDHP. You cannot also be covered by a non-hdhp plan. Example: You cannot have other coverage on a spouse s PPO plan. Example: You cannot be enrolled in Medicare. You cannot be listed as a dependent on another person s tax return. You cannot use your HSA to pay for ineligible dependents. IRS considers child dependents up to age 24 if full-time student. ACA allows children to remain on a parent s plan until age 26. You or your spouse cannot be enrolled in a healthcare FSA. Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 13
It s all about THE PROCESS. Follow the Benefits process by ACTIVELY participating in Open Enrollment. November 1-15 If you do not enroll or re-enroll in benefits, then you will have NO COVERAGE in 2019! 14
PPO Plan Design Changes 1. Emergency Room & Specialist Copays Increase emergency room facility from $125 to $150 copay. Increase specialist office visit from $40 to $50 copay. 2. Annual Physical Therapy Limits Limit physical therapy to 20 visits per person per calendar year. Currently physical therapy is unlimited, unlike 20 visits for speech and occupational therapy. 3. Out-of-Network Services in Alabama Increase the employee s coinsurance from 40% to 50% if they use an out-of-network provider in the state of Alabama. Minimal impact in Alabama. Zero impact on out-of-state claims. 15
PPO First-Dollar Deductible Medical Deductible Rx Deductible The maximum 3 per family rule will be eliminated. Each individual will be subject to the following deductibles: $175 Medical + $175 Rx = $350 Total Deductible $175 + $175 = $350 or $350 + $350 = $700 $350 + $350 + $350 + $350 = $1,400 Disclaimer: This presentation is intended to serve as a high-level benefits overview. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages or tax-favored accounts. Employees are strongly encouraged to visit hr.ua.edu/benefits/openenrollment for additional information and more comprehensive resources. 16
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 and 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 Pay expenses via debit card or manual reimbursement. Both accounts subject to use-it-or-lose-it rule. Incur expenses by December 31 of the current plan year and submit for reimbursement by March 31 of the following year or forfeit all remaining funds. 17
Premium Assistance Program UA will provide a premium discount to benefits-eligible active employees based on: 1. Family size, and 2. Total combined household income (1.5 x 2018 Federal Poverty Level). To apply, employees must submit most recent Federal Income Tax Return, W-2s and 1099s. The discount is equal to UA s single high deductible health plan premium = $54 per month. The premium assistance discount is applicable for both health plans, PPO or HDHP. Application Deadlines: Current Employees Submit documentation during Open Enrollment (November 1 15). Newly Eligible Employees 30 days from the effective date of enrollment in health plan. Total Family Size Annual Household Income (1.5 x FPL) 1 $18,210 2 $24,690 3 $31,170 4 $37,650 5 $44,130 6 $50,610 7 $57,090 8 $63,570 18
Eliminate Salary Tiers 280 employees with a salary < $26,000 that are enrolled in the health plan as of April 2018; 33% are part-time employees. Who is impacted? 150 of the 280 employees are not eligible for premium assistance due to their family size and salary greater than $18,210 but less than $26,000. Who will benefit? 340 employees across both salary tiers may be eligible for premium assistance based on current salary and number of dependents covered. The $54 premium assistance is greater than the current salary tier discount. Current Tiers Salary < $26k Salary $26k Current Discount Employee Only $72 $95 $23 per month Employee + 1 $287 $340 $53 per month Family $318 $371 $53 per month 19
PPO Plan Premiums 2018 2019 Tier Rates Tier Rates Monthly Employee UA Monthly Employee UA Employee Only $95 $394 Employee Only $108 $448 Employee + 1 $340 $702 Family without a Spouse* $386 $798 Family $371 $702 Family with a Spouse* $447 $798 Biweekly Biweekly Employee Only $43.85 $181.85 Employee Only $49.85 $206.77 Employee + 1 $156.92 $324.00 Family without a Spouse* $178.15 $368.31 Family $171.23 $324.00 Family with a Spouse* $206.31 $368.31 Bottom Line The premium revenue increase will be $6,896,779, but we need $14,661,120 to make up current deficits. * Both Family tiers can include Employee +1, 2, 3, etc., dependents. 20
Pharmacy Benefit Change UA will return to Prime Therapeutics as our pharmacy benefit management company which will better serve our employees with improved customer service: One ID card for both medical and pharmacy benefits, One source for all mailed communications, One number to call for 24/7/365 access to Member Services, and Single sign-on at mybluecross for access to medical & pharmacy claims, drug cost comparison tools, and formulary information. New ID Cards All employees will receive new ID cards from Blue Cross and Blue Shield of Alabama before January 1, 2019. Employees are encouraged to check their mailing address in mybama. Discard any old BCBS and OptumRx cards after January 1st. 21
Active Open Enrollment! If you do not enroll or re-enroll in health, dental and vision benefits or flexible spending accounts, then you and your dependents will have NO COVERAGE in 2019. 22 22
Health Plan Comparison Example 1 Zach has a sinus infection and goes to the doctor in January. Zach has employee only coverage. He has not met his first-dollar deductible yet. Disclaimer: This example is provided to highlight basic cost differences between the PPO and the HDHP, and illustrate simple payment processes for medical and Rx claims incurred under either plan. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages. Facilities and providers have different billing processes, depending on their specific financial policies. Employees are strongly encouraged to contact Customer Service at BlueCross & BlueShield of Alabama or OptumRx with actual claims questions. 23
Example 1 Zach has a sinus infection and goes to the doctor in January. Zach has employee only coverage. He has not met his first-dollar deductible yet. PPO $100 BCBS eligible charge $35 Copay Doctor bills Zach $65 ($100 - $35) HDHP $100 BCBS eligible charge $0 Coinsurance Doctor bills Zach $100 $ applied to deductible = $100 Remaining deductible = $75 ($175 - $100) $ applied to deductible = $100 Remaining deductible = $1,300 ($1,400 - $100) Annual Premium = $1,292 ($108 x 12) Annual Premium = $648 ($54 x 12) + $400 seed 24
Health Plan Comparison Example 1.2 Zach has a sinus infection and goes to the doctor in September. Zach has employee only coverage. Now let s assume Zach has met his first-dollar deductible! PPO HDHP $175 deductible has been met. $1,400 deductible has been met. $100 BCBS eligible charge $35 Copay $100 BCBS eligible charge $20 Coinsurance ($100 x 20%) Disclaimer: This example is provided to highlight basic cost differences between the PPO and the HDHP, and illustrate simple payment processes for medical and Rx claims incurred under either plan. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages. Facilities and providers have different billing processes, depending on their specific financial policies. Employees are strongly encouraged to contact Customer Service at BlueCross & BlueShield of Alabama or OptumRx with actual claims questions. 25
Health Plan Comparison Example 2 Erin breaks her foot playing soccer and goes to the ER. Erin has family with a spouse coverage. She has met her first-dollar deductible this year. Disclaimer: This example is provided to highlight basic cost differences between the PPO and the HDHP, and illustrate simple payment processes for medical and Rx claims incurred under either plan. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages. Facilities and providers have different billing processes, depending on their specific financial policies. Employees are strongly encouraged to contact Customer Service at BlueCross & BlueShield of Alabama or OptumRx with actual claims questions. 26
Example 2 Erin breaks her foot playing soccer and goes to the ER. Erin has family with a spouse coverage. She has met her first-dollar deductible. PPO $1,500 BCBS eligible charge $150 Copay for facility Hospital bills Erin = $0 $175 medical deductible met. $150 Copayment HDHP $1,500 BCBS eligible charge $0 No Copay Hospital bills Erin = $300 or 20% coinsurance ($1,500 x 20%) $2,800 family deductible met. $300 Coinsurance Annual Premium = $5,364 ($447 x 12) Annual Premium = $2,688 ($224 x 12) + $800 seed 27
Health Plan Comparison Example 3 Joanne has diabetes and a monthly Rx prescription for Humalog. Joanne has employee only coverage. She has met her first-dollar deductible. Disclaimer: This example is provided to highlight basic cost differences between the PPO and the HDHP, and illustrate simple payment processes for medical and Rx claims incurred under either plan. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages. Facilities and providers have different billing processes, depending on their specific financial policies. Employees are strongly encouraged to contact Customer Service at BlueCross & BlueShield of Alabama or OptumRx with actual claims questions. 28
Example 3 Joanne has diabetes and a monthly prescription for Humalog. Joanne has employee only coverage. She has met her first-dollar deductible. PPO Prescription cost = $800 Copay = $45 HDHP Prescription cost = $800 Coinsurance = $160 ($800 x 20%) Total Cost = $45 Total Cost = $160 Annual Premium = $1,292 ($108 x 12) Annual Premium = $648 ($54 x 12) + $400 seed 29
Health Plan Comparison Example 4 Shaun is involved in a car wreck and is hospitalized. Shaun has family without a spouse coverage. His family has not met any first-dollar deductibles. Disclaimer: This example is provided to highlight basic cost differences between the PPO and the HDHP, and illustrate simple payment processes for medical and Rx claims incurred under either plan. It is not an exhaustive list of all requirements, limitations or exceptions related to insurance coverages. Facilities and providers have different billing processes, depending on their specific financial policies. Employees are strongly encouraged to contact Customer Service at BlueCross & BlueShield of Alabama or OptumRx with actual claims questions. 30
Example 4 Shaun is involved in a car wreck and is hospitalized. Shaun has family without a spouse coverage. His family has not met any first-dollar deductibles. PPO $10,000 BCBS eligible charge $175 Deductible $400 Copay for hospital admission Total Cost = $575 HDHP $10,000 BCBS eligible charge $2,800 Deductible $1,440 Coinsurance ($10,000 - $2,800 = $7,200 remaining x 20%) Total Cost = $4,240 Shaun has now met his $175 individual medical deductible. Annual Premium = $4,632 ($386 x 12) Shaun has now met his $2,800 family deductible. Annual Premium = $2,316 ($193 x 12) + $800 seed 31
ACTIVE OPEN ENROLLMENT November 1-15 If you only remember one thing from this presentation, remember this If you do not enroll or re-enroll in benefits, then you will have NO COVERAGE in 2019. 32
Enrolling in Benefits Open Enrollment (November 1 15). Employees may also make a change within the first 30 days of hire or a qualifying life event or family status change. UA-BenefitFocus Go to www.hr.ua.edu and click the Benefits toolbar link. First-time users should select the Create an account" link located under the log-in button to create a username & password. 33
Key Takeaways 1. Active Open Enrollment (November 1 15). No Action = No Coverage. 2. Employees will have a choice between the PPO and the HDHP with an HSA. This presentation provided a high-level review only. For more information, you can attend a detailed HDHP/HSA information session: Date Location Times Thurs., October 4 Employee Resource Center 5:30 pm 7:30 pm Tues., October 9 Gorgas 205 9:30 am 11:00 am Thurs., October 25 Gorgas 205 1:30 pm 3:00 pm 3. Visit the 2019 Open Enrollment website for more comprehensive information, including FAQs, at www.hr.ua.edu/benefits/openenrollment. FOLLOW US! Twitter @BamaBenefits Instagram @bamabenefits 34