st. olaf college 2014 employee benefit...

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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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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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

off 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%

http://www.deltadentalmn.org/


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

of $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.


MEDICAL

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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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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


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

15 June 12, 2014


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


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


• 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


• 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

of 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


• 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


• 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

option, and allows members without crossover an automatic payment

option.

• 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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st. olaf college 2014 employee benefit...

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