California Employees

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California Employees
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Open Enrollment Actions

• Change medical and/or dental plan
• Enroll in medical, dental, vision
• Add eligible family members
• Opt out of medical, dental, or vision
• Cancel or enroll in TIP
• Enroll in new Health Care Reimbursement Account
• Enroll in or change DepCare

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Timing

• Open Enrollment runs from 800 a.m. (PST) on
  Friday, November 1 through midnight on Saturday,
  November 30
• Core employees use forms to make changes
• Must be received in local Benefits or Payroll
  office by 500 p.m. on November 27
• Changes effective January 1, 2003
• Including new costs

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Challenges facing Large Purchasers for 2003

• Overall 2003 health plan increases ranging from
  25 to 45
• Higher increases for Medicare plans
• Increases across all plan types HMOs, POS and
  PPO
• Slow economy limited compensation adjustments
  anticipated for employees
• Shrinking marketplace and options (e.g.,
  Medicare Choice plans)

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Future

• States budget crisis continuing
• Medical inflation continuing esp. Rx
• UC looking at group purchasing for Rx
• May pilot a consumer model plan
• Contribution strategy task force continuing

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UC Health Plans

• An employer can control
• Who is covered
• Which plans are offered
• How the plans are designed
• An employer cannot control
• Provider withdrawals from medical plans
• Plans merging or going out of business
• Plan withdrawals from service areas
• Health plan policy
• Example Approved prescription drug lists
  (formulary)

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Employee Monthly Costs
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New Rate Structure
Three tiers (old design) Four tiers (new design)
Single Self
Two-party Self plus child(ren)
Family Self plus adult
Self plus family
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New Rate Structure

• Better aligns rates with actual cost of care for
  children and adults
• Employee with children now less expensive than
  two adults or a family

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Transitional Allowance

• Employee costs are lower for employees who earn
  40,000 or less per year
• Makes rates more affordable
• Medical Contribution Base is determined by FTE
  salary rate
• As of prior January
• Upon hire
• No mid-year adjustments

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Medical Plan Choices for 2003

• Health Maintenance Organizations (HMOs)
• Health Net
• Kaiser
• PacifiCare
• Point-of-Service (POS) plan
• Blue Cross Plus
• Preferred Provider Organization (PPO) plan
• Blue Cross PPO
• Fee-for-Service plan
• Core

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New Blue Cross Plans

• UC Care (administered by Aetna) no longer offered
• New plans
• Blue Cross PLUS--point of service (POS) plan
• Blue Cross PPO--preferred provider plan
• Blue Cross of California will also administer the
  Core and High Option Plans

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Transition from Aetna to Blue Cross
2002 Plan 2003 Plan (if you do nothing)
UC Care and you live in the Blue Cross PLUS service area Blue Cross PLUS
UC Care and you do not live in Blue Cross PLUS service area Blue Cross PPO

• Check your Open Enrollment Statement
• You must name a PCP if going into Blue Cross
  PLUS, even to keep your UC Care PCP

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Blue Cross PLUS Point-of-Service (POS) Plan

• Two level plan design
• network and out-of-network
• combines managed care and self-referral
• Network benefits through 14,000 physicians, PCP
  selection required, care authorized by PCP
• Out-of-network benefits through 40,000 PPO
  physicians or all other physicians, you self
  refer
• Employee must reside in CA
• Dependents can live out-of-state and receive
  non-network benefits

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Blue Cross PLUS In-Network

• Must choose PCP, Primary Medical Group (PMG), or
  Participating Physician Group (PPG) for each
  family member
• Use online plan directories for provider codes
• http//atyourservice.ucop.edu/ go to contacts
• You pay co-payment for most services
• 20 for most doctors office visits
• No claim forms

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Fast Track for Blue Cross PLUS

• For those currently in UC Care AND in a Blue
  Cross PLUS service area
• Must select a PCP if theyre going into Blue
  Cross PLUS
• Even if they want to keep the same physician
• If no action taken Blue Cross will be assign a
  PCP.
• Special worksheet included in OE packet

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Blue Cross PLUS Out-of-Network

• You may choose any provider, but you pay more of
  the costs
• Annual plan deductible
• 500 individual 1,500 family
• You pay 30 for most services, after deductible
• No balance billing if you use a Blue Cross PPO
  Provider
• You must file claim forms

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Blue Cross PLUS Out-of-network costs
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Blue Cross PPO

• In-network, PPO providers
• Annual deductible 250 individual 750 family
• You pay 20 after deductible
• Out-of-network
• Annual deductible 500 individual 1,500 family
• You generally pay 40 for services
• Plan pays 60 of reasonable and customary charges
• You must file claim forms

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Blue Cross PPO Cost example
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Provider Directories

• Link to provider sites and Health Pages through
  UC benefits website
• http//atyourservice.ucop.edu
• Call providers directly
• Toll-free numbers in Open Enrollment booklet

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Web resources

• http//atyourservice.ucop.edu
• Medical Plan Chooser
• TBA
• Health Pages
• http//www.uc.thehealthpages.com/
• Carrier websites
• http//atyourservice.ucop.edu/contact/medical_plan
  .html

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Health Care Reimbursement Account
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What is an FSA?

• A benefit program allowing you to pay for
  out-of-pocket health care and/or dependent care
  expenses with pre-tax money
• You contribute to an FSA through payroll
  deductions
• Two types of FSAs
• Health Care Reimbursement Account (Medical,
  Dental, Vision)
• Dependent Care Reimbursement Account
• You can participate in one or both accounts

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Health Care Reimbursement Account (HCRA)
Contribution Limits

• Maximum annual contribution 5,000
• If you and your spouse are both UC employees, you
  may each contribute up to 5,000
• Minimum annual contribution 180
• HCRA contributions do not reduce the wages used
  to calculate UCRP benefits
• HCRA contributions do not affect the calculation
  of your 403(b) Plan maximum annual contribution
  amount

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What are the advantages?

• The tax advantages
• Tax-free money for health care dependent care
  expenses
• Lower income taxes
• Receive reimbursement throughout the year
• Health care expenses are tax-free
• Immediate availability of Health Care Account
  funds
• Built-in budgeting

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The FSA Tax Advantage
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What expenses are eligible?

• Vision
• Eye exams eyeglasses
• Contact lenses supplies
• Prescription sunglasses
• Laser eye surgery
• Dependent Care
• Daycare
• Private babysitter
• Care for an incapacitated adult

• Medical and Dental
• Deductibles co-payments
• Birth control pills
• Prescription drugs
• Routine check-ups
• Chiropractic services
• Dental cleanings fillings
• Orthodontia not covered by a dental plan
• And more

Please see your Plan Documents for more details
on eligible expenses.
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Who is covered?

• Health Care Reimbursement Account
• Employee
• Spouse and children
• Other IRS qualified dependents
• Dependent Care Reimbursement Account
• Children under age 13
• Mentally or physically disabled spouse
• Other IRS qualified dependents who are physically
  or mentally unable to care for themselves

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How does an FSA work?
Its easy to use an FSA with SHPS simple 2-step
process.

• Step 1
• You submit a claim.
• When you incur eligible expenses, you fax or mail
  a simple claim form to SHPS with an Explanation
  of Benefits (EOB) and/or receipt when EOB is not
  available
• Claims can be submitted anytime during the
  current plan year.
• Claims for the plan year must be received by
  April 15 of the following year.

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How does an FSA work?

• Step 2
• SHPS sends your money.
• You can choose to receive reimbursement via
  Electronic Funds Transfer (direct deposit) or by
  check.
• SHPS pays claims daily for prompt service
• Average turnaround for reimbursement is within
  5-7 days of claim receipt. Claim turnaround will
  not exceed 11 days.

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COBRA and the Health Care FSA

• How will COBRA work?
• COBRA is available for continued participation
  upon loss of eligibility.
• SHPS issues a Qualifying Event Notice to the
  participant for continuation of this benefit.
• Cost will be monthly after-tax contribution plus
  2.
• If participant elects COBRA for their Health Care
  FSA, SHPS will bill monthly
• COBRA Billing Questions should be directed to
• [phone]

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Things to remember

• When you enroll, you elect an amount to cover
  your expected out-of-pocket health care and/or
  dependent care expenses for the plan year
• Careful planning maximizes the benefits of an FSA
• The IRS has imposed a use it or lose it rule.
• Plan your FSA contributions wisely.
• Changes to account contributions can be made at
  OE or upon change in family/employment status.
• Expenses are reimbursed after they are incurred.

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SHPS is there to help
For more information, link to mySHPS website
from At Your Service http//atyourservice.ucop.edu
or go directly to www.shps.net or call the SHPS
Customer Service Center at 1-877-270-3915
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Things to consider during OE

• Self plus child(ren) coverage if your
  spouse/partner is eligible for medical coverage
  through another employer
• Health care reimbursement account if your 2003
  out-of-pocket expenses will exceed 180
• Call the plan to confirm service area, PCP, and
  prescription drug formulary

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Future options
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ScholarShare

• Californias Golden State ScholarShare College
  Savings Trust
• Sponsored by the State of California
• Administered by TIAA-CREF
• Choice of investment allocation options
• Available through UC payroll beginning in Spring
  2003

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ScholarShare

• After-tax payroll deductions
• Withdrawals tax free (federal and state) if used
  for qualified higher education expenses
• Including tuition and fees, books, supplies, room
  and board

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ScholarShare

• Information available at
• www.scholarshare.com
• Employees will receive more information in coming
  months
• Keep ScholarShare option in mind when making
  decisions about DepCare and HCRA