2015 Employee Benefit Meeting May 2015 Sarah Dahl Client Advisor - - PowerPoint PPT Presentation

• ST. OLAF COLLEGE

2015 Employee Benefit Meeting

May 2015

Sarah Dahl Client Advisor 7225 Northland Drive North, Minneapolis, MN 55428

MARSH & McLENNAN AGENCY LLC

Disclaimer

The benefits outlined throughout this presentation reflect a summary of coverage only. For specific plan details including coverage levels and benefit exclusions, please refer to the certificate of coverage.

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Agenda

• Change to Enrollment Process
• Dental Plan
• Life/AD&D and Voluntary Life
• Long Term Disability
• Medical Plans
• Health Savings Account (HSA)
• Flexible Spending Account (FSA)

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2015-16 Open Enrollment is July 20 - August 7

MARSH & McLENNAN AGENCY LLC

Change to Enrollment Process

• What’s not changing…

–Online enrollment –You have access anywhere in the world that has internet access –If you will be travelling without internet access from July 20-Aug 7, please see St. Olaf HR ahead of time to complete a paper form

• What IS changing…

–The 2015 plan year will be a PASSIVE enrollment

• This means:

–If you do not have an FSA (medical reimbursement or day care reimbursement) AND you are not making any changes, you do not need to take any action.

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Change to Enrollment Process

• IMPORTANT – FSA ELECTIONS

–If you have either the medical or dependent care FSA and wish to keep that for 2015, you MUST enroll as this is an IRS requirement. –Failure to make an FSA enrollment means you will NOT have an FSA for 2015.

• ALSO IMPORTANT – RETIREMENT ELECTIONS
• Passive Enrollment: If you do not complete an EOB…

– Matched Pre-Tax will default at current election up to 3% – Unmatched will default to $0

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Dental

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Dental Insurance

• Dental plan remains administered by Delta Dental
• No plan or rate changes!

– Last year was an increase of 4.94%

• This is your open enrollment opportunity – employees can come on or go
• ff the plan effective 9/1/15.
• Participating provider search – www.deltadentalmn.org, 651-406-5916, or

1-800-553-9536

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Coverage Election Monthly Contribution* Effective 9/1/15 Employee only $17.44 Employee + 1 $36.50 Family $56.00

*Contributions shown above are for 0.75 and above FTE. Contributions for 0.5 – 0.749 FTE employees are prorated. Dental premiums are deducted from your paycheck on a pre-tax basis.

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LIFE, AD&D, VOLUNTARY LIFE & DISABILITY

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Employer Paid Life/AD&D

• Benefits remain with CIGNA
• No cost to employees
• 2x annual earnings to $500,000
• Remember to update your beneficiary information

– You may update your beneficiary at any time.

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Voluntary Life, Voluntary AD&D

Voluntary Life Benefit Options Guarantee Issue – newly eligible employees only

Employee

1 to 2 times annual compensation to a max of $500,000; increments of $10,000 < of 2 times annual compensation to max

• f $500,000

Spouse

Up to $100,000 not to exceed 50% of the employee amount; units of $10,000 $50,000

Child(ren)

Birth to 6 months: $2,500 6 months to 19 years: $10,000 (25 if full time student) All amounts

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• No changes to the Voluntary AD&D plan

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Long Term Disability

CIGNA Benefit

Elimination Period 180 days Benefit Amount 60% of Covered Monthly Earnings up to $7,500 Maximum Benefit Period To Social Security Normal Retirement Age

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• St. Olaf College pays the premium for this coverage on your behalf.

– If you pay the tax on the premiums, any benefit you receive will be tax- free. – If you do not pay the tax on the premiums, any benefit you receive would be taxable. – You may change your election only at annual enrollment.

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MEDICAL

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2015 Medical Renewal Overview

• Medical trend in the marketplace

– BCBS: 7.3% – HealthPartners: 6.98% – Medica: 6.5% – PreferredOne: 8.43%

• Medical plan is renewing with BCBS

– Initial renewal called for a double digit increase – Multiple plan changes were reviewed – Final overall increase is 7.49%

• Reminder, 2013-2014 / 2014-2015 increases were 3.6% & 5.0%

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Employee Medical Premiums

Expiring Monthly Contribution* 2015 Monthly Contribution * Traditional or HDHP Plan Traditional or HDHP Plan Employee only $130.42 $144.00 Employee + 1 $342.28 $362.00 Family $543.04 $570.00 *Contributions shown above are for 0.75 and above FTE. Contributions for 0.5 – 0.749 FTE employees are prorated. Medical premiums are deducted from your paycheck on a pre-tax basis.

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2015 Medical Renewal Plan Changes

• On the HSA-compatible HDHP plan

– We had about 10% of medical plan participants choose the HDHP last year! – Due to IRS regulations, the Tier 1 deductible and out of pocket will change as shown below.

• NO OTHER PLAN CHANGES

– St. Olaf employer contribution to your HSA will be the same.

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HDHP plan Expiring Eff 9/1/2015 T1 single deductible & OOP $2,500 $2,600 T1 family deductible & OOP $5,000 $5,200

MARSH & McLENNAN AGENCY LLC

2015 Medical Renewal Plan Changes

• On the $600 deductible plan

– The Benefits Committee looked at several options to mitigate the initial double-digit increase. – We landed on the change that brought us the greatest savings at lowest member impact – Beginning September 1, 2015, the formulary on the $600 ded plan will be the GenRx formulary.

• NO OTHER PLAN CHANGES

– A change in formulary means:

• There are some medications that for the 2014-2015 plan year are at

the $30 copay level.

• Beginning in 9/1/2015, those same medications may be at the $80

level.

• Refer to the handout to check if you or your family is impacted.

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Fitness Discount Reminder

– Fitness Discount Program

• Go to participating fitness facility 8x per month and receive a $20

credit applied toward membership dues!!!

• To participate, you must complete an enrollment form and turn it in to

your workout facility

• Go to members.bluecrossmn.com

to find a participating facility.

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Online Care Anywhere

• “See” a physician online, 24/7 – including holidays
• www.onlinecareanywheremn.com
• Use it for:

– Sinusitis / Laryngitis / Pharyngitis – Fever / Flu – Ear infections / Eye infections – Skin conditions – For more information:

• http://www.onlinecareanywheremn.com/conditionswetreat.php

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Online Care Anywhere Availability

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Online Care Anywhere

• Fee for online care is subject to the deductible and coinsurance

– Fee is $45 per visit; any prescriptions are subject to prescription charges per your plan – You may reimburse yourself with either Flex or Health Savings Account money.

• RECOMMEDED: Pre-register before you get sick!
• http://vimeopro.com/bluecrossmn/onlinecareanywheremn-

consumer-video

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HIGH DEDUCTIBLE PLANS (HDHP) & HEALTH SAVINGS ACCOUNTS (HSA)

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What is a Health Savings Account (HSA)?

• A health savings account (HSA) is an account that you can use to pay

eligible expenses with pre-tax dollars. – Must be in conjunction with a qualified high-deductible health plan (HDHP) – You own the account – you control how you use the money in your HSA – it stays in the account until you spend it. – Tax-advantages – pay your qualified expenses with pre-tax money.

• An HSA is not the same as your medical insurance. It is a separate

account owned by the individual.

• Our administrator for the Health Savings Account (HSA) will be

SelectAccount.

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• Triple tax advantage means you save money on your health care

expenses – You contribute pre-tax money, – Interest accrues tax-free – Funds are withdrawn tax-free if used for qualified expenses

• Funds rollover each year, so you can use your HSA to save tax-free

money for retirement – “Use it or lose it” does not apply to HSAs!

• You may change your contribution amount throughout the year
• You own the account (and keep the money), even if you leave St.

Olaf, or are no longer covered by a qualified HDHP.

Benefits of an HSA

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• According to IRS regulations, HSAs can only be offered with a qualified

high-deductible health plan (HDHP).

• As determined by the IRS, the minimum deductible for an embedded

plan is $2600.

• On the qualified high-deductible plan, all medical and prescription

charges are subject to the deductible. (Preventive visits are the one exception.)

• You can find out more information on the true “cost” of your office visits,

and prescriptions and more at mybluecrossmn.com – Don’t be afraid to “shop around,” especially for prescriptions!

High-Deductible Health Plan

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• You contribute money to the HSA (either a lump sum payment or via

payroll deductions).

• You can use HSA dollars to pay your health insurance deductible, along

with other qualified expenses such as dental, orthodontia or vision services. – Just like with the Flex, dental and orthodontia expenses, and vision supplies like contacts or glasses do NOT count towards your medical plan deductible or out of pocket.

• Once you meet your deductible, St. Olaf College pays additional eligible

covered expenses in accordance with the plan.

How Does the HSA / HDHP Work?

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• Anyone who is:

– Covered by a qualified HDHP – Not enrolled in Medicare – Not covered under other non-qualified health insurance* – Not covered by another “full” medical Flexible Spending Account (FSA) – Not another person’s dependent for tax purposes

• An employer may also make a contribution on your behalf.

* “Other health insurance” does not include: specific disease or illness insurance, accident, disability, dental care, vision care and long-term care insurance

Who is Eligible to contribute to an HSA?

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• For the 2015 plan year, St. Olaf’s annual employer HSA contribution

will be:

• Same contribution for all eligible employees 0.5 FTE and above.
• The employer contribution will be distributed in two equal amounts on

the first payroll for eligible employees during Sep 1 – Jan 31, and Feb 1 – May 31; No distributions will be made during Jun 1 – Aug 31.

• REMEMBER: If you are ineligible to contribute to an HSA, it is your

responsibility to notify St. Olaf that you are also not eligible to receive the employer contribution.

HSA Contributions

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Employee only $500 Employee + 1 $1,000 Family $1,500

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• Each year, the IRS sets HSA annual contribution limits

*includes “+1” enrollment

• Limits are per tax year, which is January – December
• Limits include any employer contribution

– i.e. Your contribution + St. Olaf contribution cannot exceed IRS limits in any given tax year. HSA Contribution Limits

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2015 2016 Employee only $3,350 $3,350 Family* $6,650 $6,750

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• You are allowed to contribute the entire year’s limit when you first

become eligible for the HSA, as long as you pass the “13 month rule.” – Don’t forget to allow for the St. Olaf employer contribution.

• For individuals ages 55+, the IRS allows additional “catch-up

contributions.” – Eligible individuals may contribute an extra $1,000 for the year – This rule is meant to help save additional money for retirement.

HSA Contributions

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• If you do not participate in an HSA you can enroll in a full medical expense

FSA account which covers all eligible expenses.

• If you are participating in a HSA you can enroll in a FSA account called a

Limited Purpose FSA, which typically only allows dental and vision expenses to be reimbursed. – EXAMPLE: You contribute to an HSA that you want to save for future expenses. – At annual enrollment, you know you’re going to need a root canal / crown – You can put $2,500 into a Limited FSA to use for your crown, and save the funds in your HSA.

How HSAs and FSAs Work Together

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• Important information about the FSA grace period for the 2014-2015 plan

year.

• In order to contribute to (or receive your employer contribution to) an HSA

beginning September 2015, you must spend down your FSA to $0 by August 31, 2015.

• If you do not have a $0 FSA balance as of August 31, 2015, you cannot

contribute to (or receive your employer contribution to) an HSA until November 1, 2015. – In this scenario, you still have until October 31, 2015 to incur expenses reimbursable by your FSA, and until November 30, 2015 to submit

• expenses. (These expenses cannot be reimbursed by the HSA.)

How HSAs and FSAs Work Together

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• Distributions from your HSA are tax-free if they are taken for “qualified

medical expenses.”

• SelectAccount Health Savings Account holders will receive a debit

card. – You may also request a distribution online.

• Much like a standard checking account, HSA funds may be used as

long as funds are deposited in the account. – i.e. you aren’t allowed to “overdraw” your HSA. – NOTE - this is unlike Flexible Spending Accounts (FSAs)

• Your HSA can only be used for expenses that are incurred on or after

the date the HSA was established.

• HSA funds can be used for expenses from a prior year, as long as the

expenses incurred on or after the date the HSA was established.

HSA Distribution Rules

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• HSA distributions can be taken for qualified medical expenses for the

following people: – The account holder (person covered by the qualified HDHP) – Spouse of that individual (even if not covered by the qualified HDHP) – Tax dependents of that individual (even if not covered by the qualified HDHP)

• You may use your HSA dollars even if you are no longer covered by a

qualified HDHP.

• You may use HSA money for non-qualified expenses…BUT…

– You’ll pay income taxes, AND – A 20% tax penalty

HSA Distribution Rules

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• For individuals age 65 and older, HSA distributions can be used for non-

qualified medical expenses without facing the 20% penalty. – Income taxes will apply for non-medical distributions. – This rule is regardless of whether the individual is enrolled in Medicare.

Distributions – Age 65+

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• HSA eligible expenses are the exact same as FSA-eligible expenses
• Examples of qualified medical expenses include

– Most medical care that is subject to your deductible (doctor visits, inpatient or outpatient treatment etc.) – Prescription drugs – Insulin (with or without a prescription) – Dental / Orthodontia care – Vision care (glasses, contacts, exams, LASIK) – Select insurance premiums

• COBRA, qualified long-term care insurance, health insurance premiums paid while

receiving unemployment benefits, health insurance after you turn 65 except for a Medicare supplemental policy

Qualified Medical Expenses

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• Expenses that are not considered “qualified medical expenses” include:

– Insurance premiums (other than the exceptions listed on the previous slide) – Over-the-counter drugs (unless a prescription is retained from a physician – insulin is an exception) – Surgery purely for cosmetic reasons – General health items such as tissues, toiletries, hand sanitizer

Ineligible Medical Expenses

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• Whenever you use HSA funds to pay for a medical expense, you

should keep your receipt / billing statement. – Explanation of benefits (EOB) is not the same as a receipt

• You may need to demonstrate to the IRS that HSA distributions were

for qualified medical expenses. – Failure to provide receipts could result in a penalty.

• Health Savings Account holders will also need to file Form 8889 with

their 1040s at tax time.

Recordkeeping

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• How HSA and FSA are similar:

– Both are funded with your pre-tax contributions – Same expenses are reimbursable

• i.e. dental, medical, prescriptions, glasses, contacts, LASIK, etc.
• How HSA and FSA are different:

– FSA = use it or lose it – HSA = money is yours until you spend it – FSA = contribution is “locked in” until next annual enrollment or a family status change – HSA = you may change your contributions at will

• See handout

HSA vs. FSA

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• REMEMBER – if your spouse contributes to a “full” flex plan, you are

likely ineligible to contribute to an HSA for the remainder of your spouse’s Flex plan year. – Things like carryover and grace periods on your spouse’s FSA plan may extend your HSA ineligibility. – If you are ineligible to contribute to a Health Savings Account (HSA) you are also ineligible to receive an employer contribution.

HSA vs. FSA

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• You may be a good candidate for an HDHP with HSA if one or more
• f the following applies to you / your family:

– Low consumer of medical services – Do not need expensive prescriptions – Wouldn’t experience a cash-flow hardship if the full deductible were due before the HSA balance was built up – Want to minimize your income tax liability – You like the flexibility of the variable HSA contribution – You like the carryover / portability of the HSA

Good candidates for HDHP with HSA

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• The traditional plan might be a better choice if one or more of the

following applies to you / your family: – Are high users of Tier 2 providers (coinsurance applies after deductible) – Require expensive prescriptions

• i.e. Prescription copay is essential

– Potential liability of the full deductible before HSA is established is too much of a financial burden / risk

Poor candidates for HDHP with HSA

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• Sam is enrolled as a single member. He generally only goes to the

doctor once or twice a year, and when he does, he uses a Tier 1 provider.

Examples

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Eligible charge Traditional HDHP Office visit for sinusitis $120 $120 $120 Prescription for sinusitis $12 $10 $12 Office visit for allergies $120 $120 120 Prescription for allergies $70 $10 $70 Total charges $322 $260 $322

• St. Olaf contribution to

HSA $500 Employee liability* $260 $0

• *Does not include tax benefits of using FSA or additional HSA deductions

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• Jill is enrolled as a single member. She had an office visit, urgent

care visit and an ER visit, using Tier 1 providers.

Examples

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Eligible charge Member liability Traditional Member liability HDHP Office visit for sinusitis $120 $120 $120 Prescription for sinusitis $12 $10 $12 Urgent care visit $180 $180 180 Urgent care Rx (brand Rx) $120 $30 $120 ER visit $850 $410 $850 Total $1,282 $750 $1,282

• St. Olaf contribution to HSA

$500 Employee liability* $750 $782

• *Does not include tax benefits of using FSA or additional HSA deductions

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• You can request your claim history from BCBS

1) Call either 651-662-5001 or 1-800-531-6681 to speak with a service representative 2) Request a “claims resume, including medical and pharmacy costs.” 3) The time period of the claim resume should be Sept 1, 2013 through Aug 31, 2014, and a separate resume for Sept 1, 2014 through April 2015 (or as recent as possible). 4) If you have covered spouse/children, be sure to ask for a claim resume for each covered member. – Your spouse’s resume will be sent under separate cover – Your child’s resume may be send under separate cover

Requesting your claim history

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FLEXIBLE SPENDING ACCOUNT

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Health Care Flexible Spending Account

Healthcare Reimbursement

• Full FSA or Limited FSA
• Employees can contribute up to $2,550 per year (an increase from 2014)
• Funds are available on September 1st
• Must incur expenses during plan year (9/1 – 8/31)
• Traditional plan participants / Full FSA Section 213D expenses
• HSA plan participants / Limited FSA - vision and dental
• REMEMBER – despite this year’s “passive” enrollment, you MUST make a

health care FSA election in order to participate for the 2015 plan year.

Use it or lose it applies!

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Flexible Spending Account - Continued

• Debit cards are available
• Members who currently use crossover will remain in crossover. Those who

do not use crossover will receive a debit card.

• This allows members who have chosen crossover to continue with this
• ption, and allows members without crossover an automatic payment
• ption.
• If you wish to change from crossover to the debit card option contact

SelectAccount at 651-662-5065/1-800-859-2144 or BCBSM customer service 651-662-5004/1-866-870-0348.

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Dependent Care Reimbursement

• Pre-tax program for dependent care expenses
• Employees can contribute up to $5,000 per year per married couple
• You can withdraw up to your current contribution balance but no more
• With every paycheck new funds are deposited and are available for withdrawal
• REMEMBER – despite this year’s “passive” enrollment, you MUST make a

dependent care election in order to participate for the 2015 plan year.

Use it or lose it applies!

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ENROLLMENT PROCEDURES

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Enrollment Procedures

• Online enrollment is available wherever you have internet access.
• This is a passive enrollment – if you do not participate in the FSA and are

not making changes you do not need to take any action

• July 20 – August 7 will be your annual enrollment period

– This is the OPEN enrollment period for medical, dental, medical/dependent care reimbursement (FSA), and retirement – Medical & Dependent Care FSA plan elections for the 2015 plan year are required if you want to participate. – If you wish to change your LTD funding pre-tax or post-tax, this will be the time to do so

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Enrollment Procedures

• Benefit elections are locked for the entire plan year unless you have a

qualified change in status.

• FSA elections (or failure to elect) are locked for the entire plan year unless

you have a qualified change in status.

• REMINDER – FSA ELECTIONS

– If you have either the medical or dependent care FSA and wish to keep that for the 2015-2016 plan year, you MUST enroll. – Failure to make an FSA enrollment means you will NOT have an FSA for 2015-2016.

• REMINDER – RETIREMENT ELECTIONS
• Passive Enrollment: If you do not complete an EOB…

– Matched Pre-Tax will default at current election up to 3% – Unmatched will default to $0

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All requests for changes must be received no later than noon on Friday, August 7, 2015!

MARSH & McLENNAN AGENCY LLC

Questions???

• May 21, Viking Theater, 10:00 am and 2:00 pm
• June 10, Viking Theater, 10:00 am and 3:00 pm
• July 15, Viking Theater, 10:00 am and 2:00 pm

Thank you!

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All Election of Benefit forms must be completed no later than noon on Friday, August 7, 2015!