April 22 through May 3 marks the benefits open enrollment period for the 2019-20 plan year, which will begin July 1. With this period, of course, comes important considerations that every eligible Penn employee will want to pay attention to.
Highlights among the changes this year: Lowered supplemental life insurance rates and, for some participants, the option to increase the level of supplemental life insurance without proof of insurability; an annual dermatology screening as preventive care; new behavioral health networks for the PennCare PPO and Aetna POS plans; and an increase to the FSA limit and a new FSA and HSA platform.
This year, open enrollment will continue to be conducted in the current ADP enrollment system. By July 1, Penn will see the transfer of all benefits elections to the Workday@Penn human capital management system, boasting cloud-based technology that integrates systems like payroll, Paid Time Off (PTO), and benefits into one space.
Here, Sue Sproat, executive director of benefits in the Division of Human Resources, talks through this year’s open enrollment—what’s changed, what hasn’t changed, and what all Penn employees should check for during this year’s signup process.
What are people most frequently asking you?
This year, the good news is we are not having an increase in our health rates. Most of the feedback I get every year centers around health care costs rising. But this year, for our medical and dental plans, they’re not. Last year, they didn’t. We’re excited we have kept medical rates flat. We believe we are at a fairly stable point in managing faculty and staff costs for health benefits. We’re happy employees’ costs did not increase for two consecutive years.
Is there an obvious reason why it’s staying flat?
There’s a combination of factors. Over the last five to seven years, we’ve made a lot of changes to our plans. We did some things that would make it more cost-effective for you to use the plans. There’s also been some luck involved. Penn pays for every claim everybody has. Our plans are known as self-insured plans; that means Penn pays for every claim. When we have a good year where people do not have a lot of extraordinarily high claims, it’s to everyone’s benefit.
We believe, however, that other factors are involved, such as putting in the wellness programs. They’re part of our long-term strategy. We focused on engagement, and over time, as we increase our engagement, our faculty and staff will start thinking about it as a culture of health.
We’re not fully there, clearly, but I think all the things we’ve done over the years have gotten us to the point where people are thinking, ‘I should be walking, I should quit smoking,’ and they’re doing those things that create a culture of health over time.
Finally, there are some other things I think have contributed to it. One is medicine and technology have gotten a lot better so people don’t stay in the hospital as long. I know Penn faculty and staff are paying a lot more attention to their preventive care. It’s in the fabric of thinking, ‘I need to get annual exams done so I can avoid a big problem in the future.’
There’s a Penn Behavioral Health change this year. If you’re on the PennCare PPO, the in-network stays the same and may be expanded? What about the others?
With PennCare PPO and Aetna POS plan, behavioral health was exclusively with Penn Behavioral Health. Penn Behavioral Health has decided to no longer be a third-party administrator of behavioral health services. They are going to stay on the clinical side, so the Department of Psychiatry will still provide clinical services and be providers of behavioral health but won’t be insurers. The Penn Behavioral Health Network will be taken over by Quest Behavioral Health. Quest is owned by several different hospital groups, one of which is owned by Lancaster General Hospital. Quest brings years of experience in providing and administering behavioral health networks.
The Aetna plan participants who currently use Penn Behavioral Health network providers are going to transition to the Aetna Behavioral Health Network. The behavioral health component for the High-Deductible Health Plan is already with Aetna’s Behavioral Health Network, and the Aetna network is strong. Most of the Penn Behavioral Health providers are already in the Aetna network, and the ones who are not will be given the opportunity to join.
Dermatology screenings are now free. What prompted that?
Yes, as a result of the Affordable Care Act, there was a list of preventive screenings that had to be offered with zero copay: colonoscopies, mammograms, annual physician visits all are considered preventive on this list. But we wanted to go beyond that. Dermatology was never on this list and we felt it should be. We decided to add it to our list of preventive care. We want to remove as many barriers as we can for a faculty or staff member who may not have wanted to pay $40 or $50 to go to a preventive care specialist. If they don’t go, a few years later, they may need to have a procedure for a serious condition that should have been dealt with earlier.
Supplemental life insurance?
So, Penn has had basic life insurance paid for by Penn and supplemental life insurance paid for by the individual participant, with Aetna, and now we’re going to go with MetLife. The rates for supplemental life insurance are going down about 25 percent for everybody. So that’s good news.
There’s another important change. There’s a concept in group life insurance called ‘guaranteed issue,’ which means the amount you can purchase without having to provide any statement of health. With the way our plans are structured, when you are a new person coming in the door you can pick all the way up to five times your salary for supplemental life insurance, the first time, without having to show evidence of insurability. After that, you can only increase by one increment per year. If that coverage exceeded $500,000, then you had to provide [proof of insurability]. But with MetLife, they’re letting us go to $750,000, so some participants may be eligible for more life insurance without providing evidence of insurability.
Let’s talk flex spending. What is a Flex Spending Account, for starters, and what is the distinction between that and the Health Savings Account?
The FSA is a vehicle for you to take money out of your paycheck before you pay taxes on it, and put it aside in an account to reimburse yourself for out-of-pocket expenses associated with your health care during the year. The money can be used for health care, vision care, your dental care, your copays, your deductibles, and things like that.
There are two types of FSAs: the health care flexible spending account and the dependent care flexible spending account. The health care flexible spending account is strictly for the medical, dental, and vision expenses; the dependent care account is for child or elder care expenses. Let’s say you have a child in daycare; you can reimburse yourself for those expenses with money you haven’t paid taxes on.
The health care flexible spending account allows you to roll over up to $500. If you don’t spend the whole $2,700, you can only roll over $500. It used to be, for a long time, use or lose. You didn’t spend it all, you lost it. But now you can roll over $500.
For the health savings account, you have to be in the Aetna High-Deductible Health Plan (HDHP); you can’t be on any other plan. The concept is the same where you can put some of your own money aside. But, one advantage with the health savings account is Penn contributes the first $1,000 or $2,000 to that plan depending on if you’re single or family. Penn contributes to the HDHP but not the FSA. And you can contribute quite a bit more of your own money into an HSA. Including the $1,000 Penn gives you, you can put in $3,500 instead of $2,700 with the FSA. For family coverage, it’s quite a bit more. You can contribute $5,000, Penn contributes $2,000, so you can put $7,000 in the HSA but only put in $2,700 with a FSA.
For families, even though you have to meet a higher deductible, you can put a lot more money in the HSA, and if you don’t spend it you get to keep it, even if you leave Penn. It’s yours forever. It’s real money in a real account. And you can put it in an investment account.
The other important item for open enrollment is that we are changing vendors. For the flexible spending accounts, we are moving to WageWorks’ exclusive platform in July. The functionality of the new website will be quite a bit better. There are mobile apps and all sorts of improvements. For instance, you can take a picture of a health care receipt and upload it.
If you have an FSA already, you do not need to re-enroll, it doesn’t happen automatically?
No, you do not need to re-enroll. However, we recommend you review your current election.
Is there anything that will be significantly different with that new platform for managing the FSA?
It will be more user-friendly. You’ll only go to one place if you have commuter [benefits] and an FSA.
But the big thing is the mobile capability. You can do everything from your mobile app. The rules, though, stay the same. Some participants are concerned when they have to justify some of their claims when they’ve used the FSA debit card. FSA accounts are IRS-regulated. Sometimes, when you swipe your debit card, all the required information doesn’t get recorded, so the plan administrator may come back and ask, ‘What did you spend the dollars for?’ For example: I recently had a claim for contact lenses for my husband, and I had to submit the detailed document that had the prescription on it to show this was an acceptable health care expense.
How does the debit card function, if you don’t have any money in your account in the beginning of the year?
For the FSA, the healthcare flexible spending account, when you start July 1 the whole goal amount is loaded. So, let’s say you want to put in $2,400 for the year, that’s $200 per month. But it is now July 10 and you still haven’t even had your July paycheck yet, but you need to see the doctor. The $2,400 is on the debit card and if you needed to you could spend it all on your first day.
The HSA with the HDHP does not work that way. The only thing you have on day one is the contribution from Penn. The HSA gets replenished each month as you make payroll deductions to the account. You can’t spend what you don’t have.
Who is a good candidate for an FSA?
It definitely helps for people who have dependents, or even if you don’t have dependents and you think you know what you’re going to spend. You know you’re going to go to the doctor twice per year, you wear glasses, you have two dental appointments, and you can estimate that to be $700. If you know what your predictable health expenses are, it’s pretty easy. I can pretty much figure out that out now between my husband’s contact lenses and my own costs. I watch my FSA account, especially as the end of the plan year gets closer, so I don’t leave money on the table.
I’ve had situations where families only put in $1,000 and then found out they had a big dental expense and didn’t put enough in to cover it. You can’t change your FSA goal amount in the middle of the year. Now, the HSA with the HDHP, you can change in the middle of the year, but you can’t with the FSA.
Generally, I tell people to be conservative in their first year of using it. If they want to put a little money aside for themselves, be conservative in the first year, and then get to know what your spending is going to be each year.
Anything you’re itching for people to understand?
For this year, I’m really asking everyone to go into the enrollment system and really look at the benefits they currently have, because all that data in the ADP system will be converted over to Workday. Beneficiary choices, for example. If you have an ex-spouse and then remarry, maybe you want to update that. If someone has not checked in for a while, I’m recommending people do that this year.
My recommendation is everyone go in and make sure they’re enrolled in the right plan before open enrollment ends on May 3—like you would look at last year’s tax return when doing this year’s. That’s what I’m urging more than anything—particularly for beneficiary information. We want to make sure that’s right because family situations change and your beneficiary choices should reflect that. We are excited about having a new system, but we ask all employees to help by verifying that the benefits shown in the system are the ones they have selected.
