KCTCSKCTCS2009 2009 Employee Open EnrollmentEmployee Open EnrollmentOctober 13th – 24th, 2008

Health Insurance Health Insurance HighlightsHighlights• Mandatory Enrollment – No

Exceptions• IDS and Passwords were mailed to

employees at their home address• The New Benefits Selections Guides

will be provided to employees• The larger KEHP Handbook is available

on the DEI web-site http://www.personnel.ky.gov/dei/09OE/

• Benefits Selection Guides will include a paper application for active employees

New for 2009New for 2009 Mandatory, Active Enrollment

Web Enrollment or paper application Default to waiver with no HRA money if

employees do not enroll

Premium Holiday December 2008 No health insurance premiums deducted for

December Pre-Pay to current pay effective January 1, 2009

Virgin HealthMiles Internet based activity program Earn cash and gift cards by earning “HealthMiles” Will not be implemented until after January 1st for

KCTCS. A separate roll-out will occur

New for 2009New for 2009Carena In-home Urgent Care

◦Carena’s modern-day, physician house-call service

◦Greater Louisville area & Franklin County

◦Option for non-emergency conditions◦Call HumanFirst Nurse Advice Line◦24 hour toll free number (800) 622-

9529

New for 2009New for 2009• Coverage for Dependents to Age 25• Smoking Status change outside Open

Enrollment may be requested with proper documentation. Change will be limited to the smoker contributions and will not allow other changes to plan.

• Single plans pay 1 times the smoker amount. Parent Plus plans by 2 times the smoker amount. Family and family cross-reference will pay 2 times the smoker amount (1/2 from each employee on x-ref).

• Qualifying events that require an employee to sign and date their form or application within 30 days of the event will now change to 35 days beginning January 1, 2009.

New for 2009New for 2009A family cross-reference plan will

automatically drop to a parent plus if one spouse terms employment. The termed spouse may be added back on as a qualifying event if add form is signed and dated within 35 days of the qualifying event.

New for 2009New for 2009Due to the change to Current Deductions:• Terminations of plans will end on the 15th of

the month if an employee loses employment between the 1st and the 15th of the month.

• Terminations of plans will end on the last day of the month if the employee loses employment between the 16th and the last day of the month.

• Returning from LWOP will follow the same rule as above in that the reinstatement will occur either on the 16th or 1st day of the following month depending on the employee’s return date.

Web EnrollmentWeb Enrollment• Your KEHP Online Access will

be available for fast accurate and secure enrollment at http://kehp.ky.gov beginning October 13, 2008.

• Employees will need their ID and Password to enroll on the web.

Web EnrollmentWeb EnrollmentOnce you complete the enrollment

process online, you will see a confirmation number screen. This page will need to be printed out and kept as proof of your enrollment.◦ A copy of this confirmation MUST be

submitted to your college HR DepartmentIf an e-mail address is entered during

the enrollment process, you will receive a confirmation message.

Web EnrollmentWeb Enrollment• For assistance with employee ID# and

Password contact (866)302-5632 or (502)564-3116

• For computer or technical assistance contact (866)746-1613 or (502)564-4708

• For information about current benefits for 2009 Open Enrollment benefits (877)597-7474

• For other information relating to Open Enrollment contact (888)581-8834 or (502)564-6534

• Hours for Open Enrollment Assistance – 10/13/2008 – 10/24/2008– Monday through Friday 8:00 am – 8:00 pm– Saturday and Sunday 8:00 am – 12:00 pm

Enrollment – Paper Enrollment – Paper ApplicationsApplications• A paper application will need to be

completed on the following scenarios:– A retiree– Paying by cross-reference with a retiree– A new employee who has not yet enrolled

for 2008– Switching the “primary” plan holder on a

cross-reference payment option– Current cross-reference payment option

that two spouses want to stop– All these applications will need to be

submitted to college HR Departments or System Office employee benefits for processing

Dependent AuditDependent Audit• KEHP will be conducting a dependent audit

during the 2009 plan year.• Purposes of audit is to verify that each

dependent listed on plans is actually eligible for coverage.

• Each employee should review the dependent eligibility section for the 2009 Plan Year KEHP Handbook to determine if their dependents are eligible.

• If dependents do not meet the eligibility guidelines, employees should remove the ineligible dependents during Open Enrollment.

Dependent EligibilityDependent EligibilityUnder a new option for 2009,

employees will be able to cover their unmarried dependent children up to the end of the month in which the dependent turns 25.

Choosing this new option for unmarried dependent child(ren) may subject the employee contributions to a different tax treatment

Dependent EligibilityDependent EligibilityDependent Child Eligibility

◦Unmarried◦Family-type relationship to the plan

holder Child plan holder Stepchild Adopted/placed child Foster child Grandchild

Dependent EligibilityDependent Eligibility

• Plan holder is primarily responsible for dependents maintenance and support

• Under age 25• Any person who knowingly with intent

to defraud any insurance company by filing an insurance application containing false information or conceals for the purpose of misleading information would be committing fraud which is a crime. This includes adding a dependent to the plan that does not meet the KEHP eligibility guidelines.

Dependent EligibilityDependent EligibilityAn employee will not be able to

pay dependent premiums on a pre-tax basis if the employee’s /plan holder’s dependent(s) CANNOT MEET ONE of these definitions:

Qualifying Child Qualifying Relative

Dependent EligibilityDependent Eligibility• Qualifying Child is a child who is unmarried

and:– Family-type relationship to the plan holder– Lives with the plan holder in his/her household

for more than half of the tax year (exceptions such a “temporary absences” if a full-time student)

– Under age 19 and not a full-time student (or under age 24 if a full-time student) as of the end of the calendar year in which the member’s taxable year begins. A “student” means an individual who, during each of the five (5) calendar months during the calendar year in which the employee’s taxable year begins, is a full-time student at an educational organization.

Dependent EligibilityDependent EligibilityQualifying Child (continued)

◦There is no age requirement if a child is permanently and totally disabled

◦Individual must not provide more than half of his or her own support for calendar year in which the taxable year of the employee begins.

Dependent EligibilityDependent Eligibility• Qualifying Relative is a child or other

individual who:– Family-type relationship to the member

taxpayer (a child of the employee…etc.) and is someone who resides with the employee in his/her household for the member’s taxable year

– A person cannot be a “qualifying relative” of the member if at any time during the taxable year the relationship between the member and the person violates federal, state or local law

– Receives over half of his/her support from the member taxpayer. (Support includes food, shelter, clothing, medical and dental care education and the like.)

– Is not anyone’s (including the member’s) “qualifying child”

Dependent EligibilityDependent Eligibility• All dependents on the plan age 19-23

to be considered a qualifying child MUST be a full-time student. If they are not, they MUST meet the qualifying relative definition

• Employees who choose to add a dependent on their plan year who will turn 24 or 25 during the 2009 plan year will pay their total premiums post tax unless they can show proof that they are eligible for pre-tax.

Dependent EligibilityDependent Eligibility• Tax Consequences

– Paying dependent premiums on a pre-tax basis for an individual who does not meet the definition of “qualifying child” or “qualifying relative” may be in violation of federal tax law

– However, if a dependent child fails to meet the requirements of “qualifying child” or “qualifying relative” he or she may be eligible to be covered as a dependent on a post-tax basis pursuant to KEPH plan eligibility defined in KRS 304.17A-256. If you are electing to cover a dependent on a post-tax basis then you must acknowledge the post-tax status.

2009 Health Plan Choices2009 Health Plan ChoicesCommonwealth Optimum PPOCommonwealth Maximum

Choice*Commonwealth Capitol Choice*Commonwealth Standard PPO*

*Three of the Four plan choices have no employee contribution for single coverage!

Health PlansHealth PlansCommonwealth Optimum PPO

◦Result of combining Enhanced and Premier

◦85%-15% co-insurance in-network –70%-30% out-of-network

◦Single deductible $250, Family $500◦Single Out-of-pocket maximum

$1125, Family $2250◦$10 co-pay for office visits◦Prescriptions $5.00, $20.00 & $40.00

Prescription DrugsPrescription DrugsFor the Commonwealth Optimum

PPO and the Commonwealth Capitol Choice Plans the Prescription copays are different in 2009:

2008 2009

1st Tier $5 $52nd Tier $15 $203rd Tier $30 $40

Health PlansHealth PlansCommonwealth Maximum Choice

◦Replaces the Commonwealth Select Plan

◦Employees with the 2008 Select Plan who pick the Commonwealth Maximum Choice for 2009 will “roll over” any unused 2008 HRA funds into the HRA attached to the Commonwealth Maximum Choice Plan

◦Retirees are NOT eligible to take the Commonwealth Maximum Choice

Commonwealth Maximum Commonwealth Maximum Choice HRAChoice HRA• The KEHP funds the Health Reimbursement

Account (HRA) based on level of coverage (these funds are available first day of the plan year):

Single $1,000Couple $1,500Parent Plus $1,500Family $2,000

• When these funds are used to pay for medical and prescription services they reduce the deductible. You are responsible for all costs between the HRA funding, and the total deductible. Example: Single coverage has a $2000 deductible, HRA funds are $1000. The $1000 difference between the two, is member’s responsibility. Once the deductible has been met the plan pays 90%, member coinsurance is 10%. Because this plan has no co-pays, once the out of pocket maximum has been reached services are paid at 100%

Example: How the HRA Plan Example: How the HRA Plan WorksWorks• Kelly has the Commonwealth Maximum Choice PPO

Plan with a $1000 Health Reimbursement Account (HRA), Kelly’s deductible is $2000:– She has minor surgery at an in-network facility

• Humana calculates the provider discount and then Kelly’s doctor sends her a bill for $375

• Kelly writes her HumanaAcccess card number on the bill and sends it back to her doctor

• The $375 she paid with her HRA also applies to her deductible

– Kelly’s doctor prescribes a prescription drug that costs $125:• Kelly swipes her HumanaAccess card to cover the

prescription cost at the pharmacy, paid out of her HRA funds.• The prescription cost also reduces Kelly’s deductible

– Kelly’s out-of-pocket costs total is $0 (she used her HRA funds to pay for her services)

– Kelly still has $500 left in her HRA– Kelly has now met $500 of her $2000 deductible

HRA/FSA Integration: HRA/FSA Integration: Commonwealth Maximum Commonwealth Maximum Choice PlanChoice PlanA Health Care Flexible Spending

Account (FSA) may be used to fund member responsibility expenses on a tax free basis

Premium savings from selection of the Commonwealth Maximum Choice plan versus other selections may fund or assist in funding a FSA

Health PlansHealth Plans• Commonwealth Capitol Choice

– Brand New Plan– $500 per family member “benefit

allowance” that provides 100% coverage (subject to co-pays) for many in-network services before you start paying towards the deductible

– Benefit Allowance is “use it or lose it” –Does not roll

– Co-pays on office visits and prescriptions– After payment of $100 per admission co-

pay and $500 annual deductible, you pay nothing for additional hospital facility charges.

How Commonwealth Capitol How Commonwealth Capitol Choice WorksChoice Works• Steve has the Commonwealth Capitol Choice PPO plan

with the $500 benefit allowance, a $500 deductible, office visit co-pay $15 and a 20% co-insurance

• Steve’s first claim is for a routine care (annual exam) office visit.– Total charge, after provider discount is $125– Steve pays his $15 office visit co-pay– The plan pays 100% of the approved balance ($110). The

benefit allowance is still $500• Steve’s second claim is for strep throat, he has an office

visit and receives a prescription– Total charge, after provider discount is $85.– Steve pays his $15 office visit co-pay.– The plan pays for the approved balance of $70 from the

benefit allowance. The benefit allowance is reduced to $430.– Steve pays his $20 co-pay and picks up his prescription at the

pharmacy.– The cost of this prescription does not affect the benefit

allowance.

How Commonwealth Capitol How Commonwealth Capitol Choice WorksChoice Works• Steve has physical therapy following minor surgery, the

physical therapy benefit is subject to the deductible then 20% coinsurance.– Total cost of the service after provider discount is $1500

• The Benefit Allowance covers the first $430 ($70 was used on previous service)

• Steve is responsible for his $500 deductible, this reduces the claim balance to $570.

• Steve is also responsible for $114, which is his 20% coinsurance amount.

• Steve has now used all of his benefit allowance and has met his $500 deductible

• If Steve had chosen a plan without the benefit allowance, his total member responsibility for this claim would have been $700 ($500 deductible and $200 coinsurance).

» Total Bill 1500» Minus benefit allowance 430 Plan pays» 1070» Minus Steve’s deductible 500 Steve pays» 570» Steve’s 20% coinsurance 114 Steve pays» Balance 456 Plan pays

Health PlansHealth PlansCommonwealth Standard PPO

◦Replaces the Commonwealth Essential Plan

◦Higher member deductibles◦Higher member co-insurance◦Higher annual maximum out-of-

pocket◦Lower premiums◦NEW: A single coverage option is

now available

Health Plan Comparisons

Health Plan Comparisons

Benefit Allowance /HRA Amount

Deductible Out of Pocket Maximum (includes Deductible-excludes Office & RX co -pays)

Office Visit Co-Pay

Benefit Payments (hospital, surgery, etc)

Your Co-Insurance (payment amount)

RX Co - pays

Standard (formerly Essential)

N/A $ 750 Ind $1,500 Fam

$3,500 Ind $7,000 Fam

N/A 75% 25% Min Max$10 $25$20 $50$25 $100

Optimum (formerly Enhanced/ Premier)

N/A $250 Ind $500 Fam

$1,125 Ind $2,250 Fam

$10 85% 15% $5$20$40

Capitol choice $500 $ 500 Ind $1,500 Fam

$2,000 Ind $6,000 Fam

$15 80% 20% $5$20$40

Maximum Choice (formerly Select)

$1,000 single$1,500 Parent

& Couple$2,000 Family

$2,000 Ind $3,000 Fam

$3,000 Ind $4,500 Fam

N/A 90% 10% Deductible then 10%

Waiving Health InsuranceWaiving Health Insurance If you waive health insurance

coverage, the employer contribution towards a HRA will be $175 per month for a total of $2100 for the year

• If employee is hired with an effective date later that January 1, 2009, the $175 per month for the waiver will be prorated.– Example: Employee is hired on March 1st,

with an effective date of May 1st on their waiver with an HRA. The employee would receive $175 per month beginning with the month of May

Health Reimbursement Health Reimbursement Accounts (HRAs)Accounts (HRAs)• Who is NOT eligible for HRAs

– If employee or spouse has a Health Savings Account (HSA), you are NOT allowed to have an HRA. If you have an HSA and elect our HRA, you will be in violation of federal tax law.

–A retiree who has gone back to work and elects coverage under the retirement system

–Retirees–Spouse of a hazardous duty retiree

HRAHRATwo Separate Health Reimbursement

Accounts

Embedded HRA◦ Offered in conjunction with Commonwealth Maximum

Choice◦ Funded with employer money only◦ Administered by Humana and the DEI

Stand alone HRA◦ Available only to employees who waive health insurance◦ Funded with employer money only◦ Administered by Chard-Snyder

(Humana materials may refer to an HRA as a Personal Care Account ((PCA)PCA)

FSA vs. HRAFSA vs. HRA In addition to the HRA, an employee may

fund a Health Care FSA to reimburse unpaid qualified medical expenses (ex: Deductible, Co-pays, Co-insurance, Dental, Vision, etc.)◦ May fund with employee contributions◦ If waiving or have single health coverage, may use all or

part of the $50 Benefit for funding

For Commonwealth Maximum Choice Plan participants, when using your HRA, only plan only plan covered expenses covered expenses will count towards the plan deductible and out-of-pocket maximum (Excludes: Dental, Vision, Over the Counter Medications)

FSA vs. HRAFSA vs. HRA If you have both a Health Care Flexible Spending

Account (FSA) and a Health Reimbursement Account (HRA), reimbursement will come from your FSA account balance first.◦ The FSA balance is forfeited at the end of the plan

year (12/31/08) and 2 ½ month grace period (3/15/09).

◦ The HRA balance will roll-over from year to year as long as you remain a waiver or enrolled in the Commonwealth Maximum Choice Plan. Will not roll-over if you change your plan

selection.NOTE: If you use the Benny PrePaid Benefits Card NOTE: If you use the Benny PrePaid Benefits Card

from Chard-Snyder, reimbursements will from Chard-Snyder, reimbursements will automatically be from your FSA first until that automatically be from your FSA first until that annual election amount is depleted. Then, annual election amount is depleted. Then, reimbursement will be from your HRAreimbursement will be from your HRA.

Using Benny PrePaid Benefits Card Using Benny PrePaid Benefits Card for HRA at Pharmacies – “Waivers” for HRA at Pharmacies – “Waivers” OnlyOnlyIf employee is covered under

spouse’s health plan, they would use that health insurance card first.

Employee would then use Chard-Snyder Benny card for any copay or coinsurance amounts due.

Save Your Receipts: HRA Save Your Receipts: HRA Reimbursed ExpensesReimbursed Expenses It is important to save all itemized receipts

◦ The IRS requires proof (substantiation) that expenses are qualified under your plan’s benefits

◦ For the Commonwealth Maximum Choice Plan -Humana automatically verifies transactions, in most cases, as they occur. However, Humana may ask members to submit receipts for verification of an expense

◦ For Waivers, Chard-Snyder automatically verifies transactions, in most cases, as they occur. However, Chard-Snyder may ask members to submit receipts for verification of an expense

◦ Always save all receipts and explanation of benefits (EOB) in case you are contacted to verify an expense that could not be matched automatically

◦ If a refund is needed: Card should be credited by the provider If providers refund the member directly the member will be

required to refund the card (per IRS guidelines)

Flexible Spending Accounts Flexible Spending Accounts (FSA)(FSA)Employee Money OnlyThere are two kinds of FSA’s

◦ Health Care Spending Account for medical expenses: Minimum $ 5 per paycheck( including

$50 benefit); total annual maximum : $ 5,004 ($208.50 per paycheck)

◦ Dependent Day Care Account for Dependent care expenses Minimum $ 5 per paycheck; total annual

maximum $4,992Please refer to the FSA booklet for

further information Maximum Contribution based on tax filing

status

Flexible Spending Flexible Spending AccountsAccounts• Money does not roll from year to

year; use it or lose it rule• Can either use the Benny card or file

a paper claim for reimbursement• Over-the-counter expenses can be

reimbursed• Can be used to get reimbursed for

any dependents residing in your household

• Substantiation for Benny card may be required.

Flexible Spending Accounts Flexible Spending Accounts (FSA)(FSA)Federal regulations require that

employees that wish to enroll in a FSA do so every year

Re-enrollment is necessary to participate in a FSA account either with employee contributions or employer contributions due to the $50 Benefit

The carrier for 2009 will continue to be Chard Snyder and Associates

Flexible Spending AccountFlexible Spending Account“Grace Period”“Grace Period”Use left over money from 2008 plan year

until March 15, 2009◦ (applies to KCTCS personnel system employees

only)

Will also apply to 2009 Plan Year (2 ½ monthly grace period will be January 1 – March 15, 2010)◦ Will apply to all enrolled employees regardless of

personnel system

Flexible Spending AccountFlexible Spending Account“Grace Period”“Grace Period”

Reminder◦ You may use your FSA Benny Prepaid

Benefits card for grace period expenses. The Reimbursements will automatically be applied to the correct year

◦ Or, you may also pay for these expenses and then file for reimbursement from Chard-Snyder by mail or fax

Dependent Care Flexible Dependent Care Flexible Spending AccountSpending AccountRetirees are not eligible to

participateAmount that can be contributed

is based on your tax filing statusReimbursement by claim formBenny Card is not available for

use with the Dependent Care FSA

Web Enrollment: FSAWeb Enrollment: FSAFlexible Spending Account: FSA

CoverageKCTCS employees will NOTNOT be able to web-

enroll for FSA coverage through the DEI DEI WebsiteWebsite◦ A message will appear that states that KCTCS is

non-participating and to contact the Insurance Coordinator

Web Enrollment: FSAWeb Enrollment: FSAFSA Coverage:

FSA Enrollment is a separate process. KCTCS employees will be able to web-enroll for FSA Coverage through the Chard-Snyder Website at www.chard-snyder.com◦ If employees are currently enrolled in FSA, they will

use their current password to web-enroll◦ Detailed instructions will be available in the Chard-

Snyder material available for distribution◦ You will be able to sign up for your employee

health care and/or dependent care elections and any $50 Benefit allocations

NOTE: If you are signing up for both a FSA and a HRA, NOTE: If you are signing up for both a FSA and a HRA, you will be able to do both through the same screenyou will be able to do both through the same screen

Web Enrollment: HRAWeb Enrollment: HRAHRA Coverage: HRA Enrollment is a separate process. KCTCS

employees will be able to web-enroll for HRA Coverage through the Chard-Snyder Website at www.chard-snyder.com◦ If employees are currently enrolled in FSA, they will

use their current password to web-enroll◦ Detailed instructions will be available in the Chard-

Snyder material available for distributionNOTE: If you are signing up for both a FSA and a HRA, NOTE: If you are signing up for both a FSA and a HRA,

you will be able to do both through the same screenyou will be able to do both through the same screen

$50 Benefit Allowance$50 Benefit Allowance Eligibility is open to KCTCS personnel system regular,

full-time employees who are enrolled in single healthcare coverage or who have waived healthcare coverage.

You may use the $50 monthly benefit by electing coverage:◦ To pay for health insurance◦ To pay for dental insurance◦ To be placed in Healthcare FSA (FSA form must be

completed)◦ To purchase voluntary supplemental benefit◦ You mustmust complete a new $50 Benefit Enrollment

Form to participate in 2009◦ You may notnot use this benefit to purchase Group Life

Insurance or Supplemental Long Term Disability

Dental Open EnrollmentDental Open Enrollment Dental open enrollment is October 13 through

October 24, 2008 Dental choices:

◦ Dental Care Plus ◦ Delta Dental◦ Compdent◦ HealthResources

Dental coverage will “rollover” from 2008 to 2009 If you wish to add or drop family members or change

carriers you will need to complete a new dental application

To cancel dental coverage, employee must fill out dental application and write “Cancel Coverage Effective 1-1-09”

Dental Open EnrollmentDental Open EnrollmentReminder:If your covered dependent is over

age 19, you will need to submit a proof of student status to the dental carrier before claims are paid.

Dependents are not covered over the age of 23. They will automatically be dropped from the plan. You will need to notify your college Human Resources Office when this occurs.

2009 Insurance/Benefit CARDS2009 Insurance/Benefit CARDS

Health Insurance and Prescription Drugs

New ID cards will be issued on all health enrollmentsDental

You will only receive a new ID card if you change coverageWaivers

You will receive a Chard-Snyder Benny PrePaid Benefits card for your HRA if you are a new enrollee,

If you have a 2008 HRA and Benny card, your new 2009 election will be loaded onto it

FSA You will only receive a Benny Prepaid if you are a new enrollee If you have a 2008 FSA and Benny card, your new 2009

election will be loaded onto it

If you have both a HRA and a FSA, you will use the same Benny card

*

For Active Employees Age 65 For Active Employees Age 65 and Olderand Older

The KCTCS Health Plan is considered primary over Medicare

You do not need to sign up for Medicare Part “B” until you cease employment. You will then enroll for this coverage under a “Special Enrollment Period”

The prescription drug plan offered through the KEHP is considered “Creditable Coverage”. You do NOTNOT need to sign up for a Medicare part “D” plan

ContactsContactsHumana

Express Scripts

See inside front cover and page 4 of your Selection Guide for DEI/KEHP contact numbers

Phone: 877-KYSPIRIT

877-597-7474

Phone: 877-KYSPIRIT

877-597-7474