Significant Insurance Benefit Changes for 2015

1. Significant Insurance Benefit Changes for 2015 Presented by: Beth Ritchie

2. Agenda • High Deductible Health Plans • Health Savings Accounts • Changes for 2015 to Health, Dental and Vision Plans • Scheduling Future Benefits Fairs

3. High Deductible Health Plans (HDHP) & Health Savings Accounts (HSA)Information is based on what we know today; subject to final approval by the Group Insurance Board on August 26, 2014

4. HDHP/HSA Effective January 1, 2015, most UW System and state employees will be eligible to enroll in a high deductible health plan (HDHP) and a health savings account (HSA) • All current health plans will offer an HDHP option • For example – Dean or Dean HDHP

5. HDHP/HSA Are you now or have you ever been enrolled in an HDHP and HSA?

6. What is an HDHP? • Under a high deductible health plan, employee must pay out-of-pocket for all medical, RX and dental costs up to the annual deductible before any benefits are payable by the health plan. • Note: Specific federally mandated preventive services are not subject to the deductible or coinsurance and are covered in full by health plan • Once the deductible has been met, an HDHP acts like our current health plans • Member pays 10% of covered services until annual out-of-pocket maximum is met • Current health plans will be referred to as non-HDHP’s

7. What is an HSA? • A Health Savings Account (HSA) is a tax free savings account used to pay for eligible medical expenses (similar to Flex Spending) • Employee and employer may contribute to account (employer portion not yet determined) • Employee may change HSA contributions at any time • HSA contributions roll over every year and accumulates over time • At termination of employment, the employee keeps the HSA

8. Who is eligible for the HDHP? • The HDHP will be available to all active and retired employees and their dependents exceptif the employee: • Is enrolled in any other non-HDHP health plan, such as a spouse's health insurance plan • Is dependent of another person for tax purposes • Is covered under the graduate assistant/short-term academic staff benefits program No Big Ten institutions offer HDHP’s to this group of employees • Is eligible for Medicare (including annuitants 65 and older) or Tricare

9. Who is eligible for an HSA? • To be eligible to participate in the HSA, the individual must meet all of the following: • MUST be enrolled in a State Group Health HDHP • Cannot be covered by a non-HDHP health plan, such as a spouse's health insurance plan • Cannot be enrolled in any Medicare benefits or Tricare • Cannot be a dependent of another person for tax purposes • Must be a WRS participant Employee covered under the graduate assistant/short-term academic staff benefits program are not eligible

10. HDHP/HSA Who is most likely to be interested in enrolling for the HDHP/HSA? Savers – Highly compensated and tech savvy-employees who do not expect to incur medical costs and/or can afford to pay the deductible out-of-pocket and use the HSA for long-term savings • Additional retirement savings vehicle • Maintaining a tax shelter • Building a health care nest egg

11. HDHP/HSA Spenders– Low-wage earners who will likely need to use HSA and employer contribution every year • Greatest concern is that this population understands how the plan works • 76% of Americans live paycheck to paycheck • 26% of a low-earning family’s income may be needed to cover the average HDHP out-of-pocket limit • 55% of low-income workers experience difficulty paying medical bills or have medical debt. • HDHP/HSA provides way to budget. Direct health premium savings to HSA

12. HDHP/HSA Risk-takers – Those willing to risk the lower premium costs in exchange for higher out-of-pocket costs if medical services are received.

13. HDHP by the Numbers • The premium for the HDHP will be lower than the current premiums (premium not yet determined) • After the deductible has been met, the HDHP’s will typically provide same benefits as the current non-HDHP’s • Preventive services, including designated medical services and prescription drugs and preventive dental for children, are not subject to the deductible

14. HDHP by the Numbers • You must pay the full cost of non-preventive medical, dental and prescriptions goods and services until the deductible is met including: • Prescription drugs not on the preventive list (as determined by Navitus) • Dental exams/cleaning (only pediatric preventive dental services are not subject to the deductible)

15. HDHP by the Numbers • First Claim of the Year – $10,000 surgery • +For illustration only. • *Annual out-of-pocket maximum for the non-HDHP plan is $500 for an individual/$1,000 family.

16. HDHP and ERA • Employees who participate in an HDHP are not eligible for the Employee Reimbursement Account (ERA) Health Care Flexible Spending Account (FSA). It has no impact on the Dependent Daycare FSA. • A Limited Expense Health Care FSA will be offered to employees electing the HDHP. If a limited plan is elected, it can be used only for dental or vision expenses not paid by any other insurance plan.

17. ERA & HSA Vendor • The ETF Board intends to contract with eflex, a division of TASC, to be the third party administrator as of January 1, 2015 for the: • Health Savings Account • Health Care Expense FSA • Limited Flexible Spending Accounts • Dependent Care FSA • Commuter Benefits • Contact info will be provided as it is available

18. HDHP & HSA Unknowns There are still several outstanding questions and unknowns including: • Educational tools that will be developed by ETF and HSA vendor • If/how the HSA will receive roll-ins from other HSAs • Cost and funding of any HSA-related fees • Employer contribution • Amount • Timing of contribution • Funding

19. HDHP & HSA Unknowns • How HSA elections and changes will be made (with vendor vs with employer) • Rules surrounding those who have leftover money in ERA program for 2014 but want to enroll in HDHP/HSA for 2015 • W-2 reporting requirements for HSA • How HDHP and HSAs flow through HRS – analysis is currently underway

20. Main Takeaways Every health plan will also offer a high deductible health plan option BUT there will be only one HSA plan and one HSA vendor. Can only enroll in HSA if enrolled in HDHP under State Group Health Plan

21. HDHP/HSA Communications • The UW System Administration Office of Human Resources & Workforce Diversity (OHRWD) is already communicating changes to UW System HR, payroll and benefits staff • The ETF Board has selected an HSA vendor and ETF is in contract negotiations with them. • Large employee-focused educational effort to begin in mid to late summer. Prior to ABE, we plan to provide: • Tools to assist employees in making health plan choices • Post card mailing to employee’s homes

22. Annual Benefit Enrollment Period October 6 – 31, 2014 It’s Your Choice Kick-Off: September 25, 2014

23. Changes for 2015 • There are no changes to the benefits or coverage under State Group Health for 2015, except for those that apply specifically to the HDHP • VSP will offer an open enrollment • EPIC Benefits+ will offer a special enrollment – likely with a graduated benefit • Possible benefit enhancements to EPIC Benefits+ coverage for AD&D • Dental Wisconsin: Unknown

24. Benefits Fairs Schedule • Oct 7: UW-Eau Claire, UW-Madison, UW-Platteville • Oct 8: UW-Green Bay, UW-Milwaukee, UW-River Falls, UW-Superior • Oct 9: UW-Stout, UW-Whitewater • Oct 15: UW-LaCrosse, UW-Stevens Point • Oct 16: UW-OshKosh • Oct 22: UW-Parkside Some vendors may not be able to attend your benefits fair because of multiple fairs on the same date

25. Benefits Fairs • When do you decide on the date for your institution’s benefits fair? • How do you select a date for your fair? • Do you find that employees want a benefits fair early in the enrollment period? • Would an online calendar be helpful so you can see when other UW institutions have scheduled their benefits fair?

26. Thank you! Questions?