borgess health 2014 nonunion benefit update
DESCRIPTION
Borgess Health 2014 Nonunion Benefit Update. Pete Krueger Administrative Director HR Operations. Al Hoffman Compensation and Benefits Manager. BH 2014 Benefit Update. Today’s Agenda Review of current dynamics Paid Time Off Retirement Programs Healthcare Benefits Questions. - PowerPoint PPT PresentationTRANSCRIPT
Borgess Health2014
NonunionBenefit Update
Pete KruegerAdministrative DirectorHR Operations
Al HoffmanCompensation and Benefits Manager
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Review of current dynamics Paid Time Off Retirement Programs Healthcare Benefits Questions
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Our Reality Includes the Following Dynamics
Reductions in reimbursement Increases in
Charity Care Bad Debt
Affordable Care Act Deployment of Symphony
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These Dynamics Have Significant Impact
Affordable Care Act
New fees, taxes, and charges New payment systems will be established with
the goal to directly tie reimbursement to performance – ie HCAHPS/value based purchasing
Borgess will experience a significant reduction in Medicare payments Conservative estimates indicate a $50 million
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These Dynamics Have Significant Impact
Symphony Deployment
Standardize/Align Human Resources, Finance, and Supply Chain programs and services throughout Ascension Health provide significant opportunities for financial improvement through reduced costs or gains in efficiencies.
This process will in some cases require Borgess associates to change the way we work and follow a different set of policies/programs.
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What does this all mean? Borgess will continually have pressure to do
more with less financial resources
Borgess must be more efficient in all that it does
Borgess must, where it can, leverage its relationship within Ascension to use buying power and market share to reduce its cost of operations
Borgess must ask all of its associates to continue to work together as a team to meet current and future challenges
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And What Does This Mean for Benefit Programs
Symphony standardization/alignment of programs/policies will have positive financial implications, but will require associates to demonstrate additional flexibility
Associates need to be sure they understand benefit program changes and ask questions
Associates need to make educated choices regarding healthcare benefits, develop health habits, and be wise consumers.
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Paid Time Off
Certain aspects of current PTO programs will change as of January 2014
(Impact will vary to some BH companies)
PTO Hours will be earned based on hours worked
Currently for BH Associates
•Every pay period a PTO accrual is added to your PTO bank based on your status and years of service
As of January 1st
•Associates will still accrue PTO every pay period but the accrual will be based on hours worked and years of service
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Paid Time Off
Impact of accruing PTO based on Hours Worked
Associates with a status of less than fulltime will be recognized for working additional hours
PTO accruals will be applied to hours worked up to a maximum of 80 hours per pay period
The following hours will be considered hours worked for purposes of PTO accrual
Regular paid hours of work Low need time Paid PTO hours Jury duty Bereavement leave Military leave
(Premium hours, such as call pay, stand by pay, etc. are excluded)
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Paid Time Off
PTO accrual rates will be adjusted to account for the two additional holidays; and the number of holidays will increase from 6 recognized holidays to 8
The intent is to designate the following days will be the new Borgess holidays:
New Year’s Day President’s Day Good Friday Memorial Day Independence Day Labor Day Thanksgiving Christmas
Where applicable, Holiday time will be separated from PTO accruals and as January 2014 – 2 different banks; Borgess Health will recognize 8 holidays
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Paid Time OffImpact of Revised Holiday Policy
Currently
FT receive 6 holidays
RPT/PT varies, but generally receive 3 holidays
As of 1/1/14 (example)
•1.0 FTE (40 hrs/wk) • receives 8 hours per holiday
•.8 FTE (32 hrs/wk) • receives 6.4 hours per holiday
•.6 FTE (24 hrs/wk) • receives 4.8 hours per holiday
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Paid Time OffAndrew Associate works 24 hours/week. He is fortunate that he is not scheduled to work any holiday in 2014. Prior to the new PTO policy, Andrew would have received 24 hours for holiday pay. However, in 2014 he will receive
New Year’s Day 4.8 hours President’s Day 4.8 hours Good Friday 4.8 hours Memorial Day 4.8 hours Independence Day 4.8 hours Labor Day 4.8 hours Thanksgiving 4.8 hours Christmas 4.8 hours
Total = 38.4 Hours of holiday time
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Paid Time OffImpact of Revised Holiday Policy
What happens if I am scheduled to work a holiday?
Associates will not receive holiday pay up to their standard hours;
Instead, associates will have 90 days to utilize the hours for a given holiday
Any holiday time not utilized after this 90 day period will be lost
If the rescheduled holiday hours are cancelled at the supervisor’s request or utilizing the time causes the associate to work over their standard hours – the hours will be paid the first pay period following the 90 day window.
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Paid Time OffHoliday Example
Emily works July 4, 2014, she receives time and half for hours worked but not her holiday pay as she worked her standard hours
In order to receive her holiday, she needs to schedule an additional day off between July 4th and October 4th
If Emily doesn’t schedule that additional day, she will lose that holiday pay
If Emily’s supervisor can’t grant the time off for this day, Emily will automatically receive her holiday after the 90 day window expires
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Paid Time OffOther PTO Policy Revisions
Standard PTO maximum – 320 hours
PTO Sell
PTO sell options : 80 hours per year
A minimum of 80 hours must be retained within your PTO bank
Sells allowed twice per year (at a time of their choosing) – cash out will be at 90% of your base hourly rate
Revised PTO policy will be made available to associates prior to January 2014
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Retirement Program - BLMHTransition to New Retirement Program
As of January 1, 2014, any accrued benefit under the defined benefit/pension program will be frozen
This benefit will be available to you under the normal provisions for a retiree under the Ascension Health Retirement/Pension program
After January 1, 2014, eligible associates will continue to receive a retirement benefit but will receive the benefit under a new Defined Contribution Retirement program
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Retirement Program - BLMHAdditional Clarification
Defined benefit retirement program
Promises a specific monthly benefit based on years of service and employee earnings
Defined contribution retirement program
Both the employer and employee contribute dollars into a retirement account whereby interest can be earned
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Retirement Program-BLMHComparison of Retirement Programs
Retirement Program Through 12/31/13
Eligible associate retirement benefit under the deferred benefit retirement will be frozen
Retirement Program as of 1/1/14
Eligible to receive an Employer Automatic contribution (EAC) based on years of service:
2% ------less than 5 years
2.5% ----5 to 10 years
3.0%---- 3.0% greater than 10 years and less than 15 years
3.5%----greater than 15 years of service
Eligible for a 50% match to their 403(b) plan up to the first 5% that is deferred
Employer Match effective 1/1/14 – no waiting period for newhires
5 year vesting for EAC 3 year vesting for Employer Match
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Retirement Program – BLMH
Additional informational sessions will be scheduled and provided by Kris Hapke Borgess’
Transamerica Retirement Solutions Representative
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Healthcare BenefitsGeneral Considerations
Borgess health benefits programs are a central component of your total rewards structure
Borgess health benefits compromise approximately between 30% to 40% of the average Borgess associate’s total compensation
Health and wellness benefits are an important part of Borgess’ ability to attract and retain associates
Healthcare expenses continue to trend higher
Most employers are sharing more of the cost of benefits with their associates
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Healthcare BenefitsStrategies to Impact Borgess Benefit Cost
Adjust associate benefit premiums
Revise plan designs
Encourage associates to be wise healthcare consumers – make the utilization of Tier 1 networks/providers a priority
Associates participate in Wellness programs and make a commitment to a healthy lifestyle
Leverage Ascension Health’s size to provide benefit programs at reduced cost
Borgess Health will utilize a more market competitive plan design
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Healthcare Benefits
SmartHealth Plan Design Changes as of January 1, 2014
Deductible and Co-Insurance will be utilized for all benefit Tiers
Deductible:The amount you have to pay out-of-pocket for expenses before the
insurance company will cover the remaining costs
Co-Insurance
A co-sharing agreement between the insured and the insurer under a health insurance policy which provides that the insured will cover a set percentage of the covered costs after the deductible has been paid.
Copays
A fixed payment where the insured pays a specified amount of out-of-pocket expenses for health-care services such as doctor visits and prescriptions drugs at the time the service is rendered, with the insurer paying the remaining costs. Co-pays do not count towards and individual’s annual out of pocket maximum
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Healthcare Benefits
2014 SmartHealth Plan Design
Domestic/ Tier 1 In-Network/Tier2 Non-Network/Tier 3
Deductible $200 / $400 $600 / $1,200 $3,000 / $6,000Coinsurance 90% / 10% 75% / 25% 50% / 50%
Out-of-Pocket Maximum $1,400 / $2,800 $3,400 / $6,800 $6,000 / $12,000
Office Visit - PCP$15 copay + Deductible
$25 copay + Deductible
Deductible + Coinsurance
Office Visit - Spec$25 copay + Deductible
$35 copay + Deductible
Deductible + Coinsurance
Urgent Care$40 copay + Deductible
$50 copay + Deductible
Deductible + Coinsurance
Hospital InpatientHospital Outpatient
Emergency Room
Preventive CareDeductible + Coinsurance
In-house Rx N/ARetail Rx
HRA Opportunity
100%$7 / $15 /$30
Covered up to 3x per year at in-house copays
Plan Design Feature2014
Subject to Deductible / Coinsurance
$150
Wellness Program
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Healthcare Benefits
Example
Physician Office Visits
Currently when you see your Borgess primary care provider you pay an office co-pay of $15
Beginning in January, your office co-pay will remain the same, however you will have to satisfy a deductible as well
January 15th, you go to your Primary Care Provider (PCP), due to the flu and this is your 1st medical visit for the year. The total office visit expense is $100. Your patient responsibility for this visit will be as follows:
Copay ----------$15Deductible-----$85
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Healthcare Benefits
Associate SmartHealth Premiums
On average, Borgess Health associate premiums represent approximately 22.5% of medical/Rx benefit costs
Survey data indicates that a majority of employers share costs with associates at a rate of 25% or higher
As of January 1, 2014, SmartHealth benefit premiums will be targeted at a 25% contribution rate
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Healthcare Benefits
2014 Rates
2014
Coverage
Employer Monthly
Premiums
Associate Monthly
Premiums
Associate Pay Period
Premiums
Increase per Pay Period
Single $661.88 $165.47 $76.37 $11.36
EE + Spouse
$1,194.09 $298.52 $137.78 $21.47
EE + Children
$977.69 $244.42 $112.81 $16.44
Family $1,473.09 $368.27 $169.97 $21.57
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Healthcare Benefits
2014 Additional Benefit Changes
Dental
Vision
Basic Life
Family AD & D Coverage
Network Exclusions
Short Term Disability Rates
Benefit Term Date
Additional Dependent Coverage
HRA-Wellness Program
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Healthcare Benefits
2014 Dental Changes
3 Dental Plans for 2014
Dental Comprehensive Plus (Formally known as the High Dental Plan)
No Plan Design Changes
Dental Comprehensive (Formally known as the Standard Dental Plan)
Deductible is reduced from $100 per participant to $25 Individual / $75 Family
Dental Basic (New Plan Offering for 2014) 100% Preventive 50% Basic (No Major Coverage) No Major services covered $500 Annual Max
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Healthcare Benefits
2014 Vision Changes
New Vision Provider
VSP a national vision provider that provides vision care to over 59
million participants
Well Vision Exam
Focuses on your eyes and overall wellness Every calendar year. $10 Co-Pay
Frames
$130 allowance for a wide selection of frames or contact lenses20% off amount over your allowanceEvery calendar year
Lenses
Single vision, lined bifocal, and lined trifocal lensesPolycarbonate lenses for dependent childrenEvery calendar year
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Healthcare Benefits
2014 Other Plan Changes
Basic Life & AD&D Coverage
Current Plan allows up to 1.5 times coverage of your annual salary
New Plan allows up to 2 times coverage of your annual salary
Voluntary Associate & Family AD&D plan
A supplemental plan that you can purchase Accidental Death and Dismemberment Coverage for you and your family. Coverage levels available are 1 – 10 times your annual salary
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Healthcare Benefits
2014 Other Plan Changes
Network Exclusions
All current network exclusions for 2014 have been eliminated (Bronson, Spectrum, Lakeland & Metro)
Services at these entities will be covered at Tier 2
OB High Risk and Inpatient Peds will continued to be covered at Tier 1 at any Blue Cross/Blue Shield provider
Short Term Disability
Borgess will continue to subsidize a large portion of this benefit
Associates premiums will be based upon their age and income
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Healthcare Benefits
2014 Other Plan Changes
Termination of Benefits
Currently benefits term at midnight on your last day of employment
Benefits will now terminate on the last day of the month that contains your termination date
Dependent Children benefit coverage terms on their 26th birthday
Dependent Coverage
Borgess will be expanding its definition of dependents and will now cover any child with respect to whom the Eligible Associate has been granted court appointed full legal (both managing and possessory conservatory) custody or guardianship
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Healthcare Benefits
2014 Other Plan Changes
Health Reimbursement Account (HRA)
This is an account that reimburses associates for their out of pocket medical expenses
This account is “Employer Funded”
Funds from this account can be rolled over for up to 3 years
Account works very similar to a Flexible Spending Account (FSA)
Funds are tax free
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Healthcare Benefits
2014 Other Plan Changes
HRA Opportunities for 2014
Must be enrolled in SmartHealth to participate
$600 in total rewards will be available to associates
$350 for completion of an HRA (Health Risk Appraisal); HRQ (Health Risk Questionnaire) and a follow up documented visit with your PCP (Primary Care Provider)
- These funds will be made available in your account with-in 2 weeks after completion of these activities
$250 for activities related to fitness and other related wellness activities. These funds will be made available at the end of the calendar year.
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Healthcare Benefits
2013 Wellness Awards
The distribution of the 2013 Wellness awards will change slightly, when they are awarded in January 2014
If the associate earned a Level 5 award, the prize selection that will be available for the participant is as follows:
$325 Cash (taxable)
1 Year Fitness Center Membership
Premium offset (January thru August)
- Example – If you earn $500, you will receive $29.41 a pay period for 17 pay periods to off set your premiums. This program will have to stop prior to 9/1, as this will not be supported by Symphony.
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Benefit Enrollment Packets will be mailed October 4th
Detailed Information will be available and posted on the HR Intranet site (www.hr.borgess.com)
Benefit Q&A drop in sessions will be made available the weeks of October 7th and 14th (specific times and locations will be posted on the HR intranet site)