november 1 -15, 2018 - human resources forms...november 1 -15, 2018 2 open enrollment disclaimer:...

• 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)

November 1 -15, 2018

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Open Enrollment

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.

• 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!

Active Open Enrollment

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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.

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Health Plan Financial Status

UA’s self-funded health plan has an overall ($14,661,120) loss since 2015.

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Cost Drivers

• 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

Vision Premiums

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Tier 2018 2019

Employee $5.74 $5.74

Employee + 1 $10.59 $10.59

Family $18.52 $18.52

Dental Premiums

Tier 2018 2019

Employee $28.09 $28.09

Employee + 1 $55.04 $55.04

Family $79.75 $79.75

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.

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We used to have passiveenrollment. You could

keep your current benefits without logging in to BenefitFocus.

THIS YEAR IS

DIFFERENT!

You must ACTIVELYparticipate in

Open Enrollment.

Select your health, dental, vision coverage & flexible

spending accounts, or


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What is a High Deductible Health Plan (HDHP)?

Health PlanHDHP PPO

High Deductible Health Plan Preferred Provider Organization

Premiums Lower Higher

Deductibles Higher Lower

Member Cost Share

(after deductible is met)Coinsurance (20%) Copayments

Tax-Favored AccountsHealth Savings Account (HSA)

Dependent Care FSA

Healthcare FSA

Dependent Care FSA

Coverage Effective First of the month following date of hireDate of Hire or

First of the month following

Third Party Administrator Both plans are administered by Blue Cross & Blue Shield of Alabama.

Network Access Both plans have the same network access and provider discounts.

Covered Services Both plans have the same covered services.

Preventive Services Both plans cover FREE preventive services at no cost share to the member.



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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.

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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 BalanceIndefinite Carryover

Expenses must be incurred after HSA is open,

but money can be disbursed in later years.

“Use it or lose it” RuleExpenses must be incurred within the plan

year and reimbursed by March 31 of the

following year.

Portability Yes No



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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.



https://www.irs.gov/publications/p502

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HSA 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 UA “Seed Money” Contribution

Employee Only $400 per year

Family without a Spouse $800 per year

Family with a Spouse $800 per year

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.

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:

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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.

IRS Eligibility Rules for HSA



https://www.irs.gov/publications/p969

It’s all about

THE PROCESS.

Follow the Benefits process by ACTIVELY

participating in Open Enrollment.

November 1 - 15

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If you do not enroll or re-enroll in benefits, then you will have


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.

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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.

1. Emergency Room & Specialist Copays

Increase emergency room facility from

$125 to $150 copay.

Increase specialist office visit from

$40 to $50 copay.

PPO Plan Design Changes

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PPO First-Dollar Deductible

Medical 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 DeductibleRx Deductible

$175 + $175 = $350

$350 + $350 = $700

$350 + $350 + $350 + $350 = $1,400

or



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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.

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

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Premium Assistance Program

https://aspe.hhs.gov/poverty-guidelines

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.

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Eliminate Salary Tiers

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

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.

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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.

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Pharmacy Benefit Change

https://www.bcbsal.org/

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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.

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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.

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Health Plan Comparison – Example 1

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.

https://www.bcbsal.org/customeraccess/

https://www.optumrx.com/public/landing

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)

✓ $ applied to deductible = $100

✓ Remaining deductible = $75

($175 - $100)

HDHP


• $0 Coinsurance

• Doctor bills Zach $100

✓ $ applied to deductible = $100

✓ Remaining deductible = $1,300

($1,400 - $100)

Example 1

Annual Premium = $1,292 ($108 x 12) Annual Premium = $648 ($54 x 12) + $400 seed

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PPO

✓ $175 deductible has been met.


• $35 Copay

HDHP

✓ $1,400 deductible has been met.


• $20 Coinsurance ($100 x 20%)

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!




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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.




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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


• $0 No Copay

• Hospital bills Erin = $300 or 20% coinsurance ($1,500 x 20%)

✓ $2,800 family deductible met.

✓ $300 Coinsurance

Example 2

Annual Premium = $5,364 ($447 x 12) Annual Premium = $2,688 ($224 x 12) + $800 seed

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Joanne has diabetes and a monthly Rx

prescription for Humalog.

Joanne has employee only coverage.






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Joanne has diabetes and a monthly prescription for Humalog.

Joanne has employee only coverage.


Example 3

HDHP

• Prescription cost = $800

• Coinsurance = $160 ($800 x 20%)

• Total Cost = $160

PPO

• Prescription cost = $800

• Copay = $45


Annual Premium = $1,292 ($108 x 12) Annual Premium = $648 ($54 x 12) + $400 seed

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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.




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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


• $175 Deductible

• $400 Copay for hospital admission


✓ Shaun has now met his $175

individual medical deductible.

HDHP


• $2,800 Deductible

• $1,440 Coinsurance ($10,000 - $2,800

= $7,200 remaining x 20%)

• Total Cost = $4,240

✓ Shaun has now met his $2,800

family deductible.

Example 4

Annual Premium = $4,632 ($386 x 12) Annual Premium = $2,316 ($193 x 12) + $800 seed

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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.

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• 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.

Enrolling in Benefits

UA-BenefitFocusGo 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.

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http://www.hr.ua.edu/

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:

3. Visit the 2019 Open Enrollment website for more comprehensive information,

including FAQs, at www.hr.ua.edu/benefits/openenrollment.

Key Takeaways

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

FOLLOW US! Twitter @BamaBenefits

Instagram @bamabenefits

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http://www.hr.ua.edu/benefits/openenrollment

november 1 -15, 2018 - human resources forms...november 1 -15, 2018 2 open enrollment disclaimer:...

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