2014 Employee Benefit Meeting May 2014 Sarah Dahl Client Advisor - - PowerPoint PPT Presentation

• ST. OLAF COLLEGE

2014 Employee Benefit Meeting

May 2014

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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MARSH & McLENNAN AGENCY LLC

Agenda

• Dental Plan
• Life/AD&D and Voluntary Life
• Long Term Disability
• Medical Plans

–New plan option for 2014

• Health Savings Account (HSA)
• Flexible Spending Account (FSA)

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Dental

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MARSH & McLENNAN AGENCY LLC

Dental Insurance

• Dental plan remains administered by Delta Dental – no plan changes!
• Combined increase of 4.94%

–The disparity across enrollment tiers is based on usage –1% of this is leftover from the addition of implant coverage from last year

• This is your open enrollment opportunity – employees can come on or go
• ff the plan effective 9/1/14.
• Participating provider search – www.deltadentalmn.org, 651-406-5916, or

1-800-553-9536

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Employee only: +2.46% Employee + 1: +4.82% Family: +6.00%

MARSH & McLENNAN AGENCY LLC

Dental Premiums

Coverage Election Expiring Monthly Contribution* Monthly Contribution* Effective 9/1/14

Employee only $17.02 $17.44 Employee + 1 $34.82 $36.50 Family $52.82 $56.00

*Contributions shown above are for .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 and AD&D

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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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.

MARSH & McLENNAN AGENCY LLC

MEDICAL

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MARSH & McLENNAN AGENCY LLC

2014 Medical Renewal Overview

• Medical trend in the marketplace

– BCBS: 6.5% – HealthPartners: 6.8% – Medica: 9.02% – PreferredOne: 8.43%

• Medical plan is renewing with BCBS

– St. Olaf premium increase is 3.62%

• Reminder, 2013 premium increase was approximately 5%

– No plan changes to current plan – Adding Health Savings Account (HSA) compatible high deductible plan as an option

• Refer to handout for plan comparison

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Employee Medical Premiums

Expiring Monthly Contribution* Monthly Contribution Effective 9/1/14* Traditional Plan HDHP Plan Employee only $125.86 $130.42 $130.42 Employee + 1 $330.32 $342.28 $342.28 Family $524.06 $543.04 $543.04 *Contributions shown above are for .075 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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MARSH & McLENNAN AGENCY LLC

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

MARSH & McLENNAN AGENCY LLC

BLUE CROSS/BLUE SHIELD VALUE ADDS

• Online health and wellness resouces on myBlueCross
• Online health assessment
• Online coaching
• Stop-Smoking Support
• Fitness Discounts (up to $40)
• 24-Hour Nurse Advice line
• Employee Assistance Program
• Healthy Start Prenatal Support
• Chronic Condition Management

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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 $2500.

• 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 2014 plan year, St. Olaf’s annual employer HSA contribution

will be:

• 0.5 – 0.749 FTEs will receive a pro-rated amount.
• If you are eligible, you will receive 50% of the employer contribution in

September, and the remaining 50% distributed evenly with the first paycheck each month for the following 11 months.

• 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

MARSH & McLENNAN AGENCY LLC

• 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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2014 2015 Employee only $3,300 $3,350 Family* $6,550 $6,650

MARSH & McLENNAN AGENCY LLC

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

beginning September 2014, you must spend down your FSA to $0 by August 31, 2014.

• If you do not have a $0 FSA balance as of August 31, 2014, you cannot

contribute to (or receive your employer contribution to) an HSA until November 1, 2014. – In this scenario, you still have until October 31, 2014 to incur expenses reimbursable by your FSA, and until November 30, 2014 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 to be ineligible to contribute to an HSA for the remainder of that tax year in which your spouse’s Flex plan ends. – 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

MARSH & McLENNAN AGENCY LLC

• 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

MARSH & McLENNAN AGENCY LLC

• 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, 2012 through Aug 31, 2013, and a separate resume for Sept 1, 2013 through April 2014 (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 $2,500 per year
• 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

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

Use it or lose it applies!

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ENROLLMENT PROCEDURES

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Enrollment Procedures

• A new, online enrollment process will be used for the 2014 annual enrollment

period and will be available wherever you have internet access.

• More information will be provided on this closer to enrollment time.
• July 21 – August 1 will be your annual enrollment period

–This is the OPEN enrollment period for medical, dental, and medical/dependent care reimbursement (FSA) –New FSA plan elections for the 2014 plan year will be required –If you wish to change your LTD funding pre-tax or post-tax, this will be the time to do so

• Elections are locked for the entire plan year unless you have a qualified

change in status All requests for changes must be received by no later than noon on Friday, August 1, 2014

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Questions???

• -May 15, May 20, May 22, June 19, July 15
• -Viking Theater, 9:00 am and 1:00 pm

Thank you!

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