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Legislative Wrap-up Sparb Collins NDPERS. Legislation and other actions Retirement (HB 1452 & HB1058) Health Insurance ( HB 1059)

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Presentation on theme: "Legislative Wrap-up Sparb Collins NDPERS. Legislation and other actions Retirement (HB 1452 & HB1058) Health Insurance ( HB 1059)"— Presentation transcript:

1 Legislative Wrap-up Sparb Collins NDPERS

2 Legislation and other actions Retirement (HB 1452 & HB1058) Health Insurance ( HB 1059)

3 RETIREMENT

4 NDPERS Funded Ratio

5 NDPERS Main System Investment Returns

6 NDPERS Funded Ratio

7 The challenge

8 2011 Session Recovery Plan SHARED RECOVERY PLAN

9 2011 Session Recovery Plan

10 Recovery Goals Stop the downward trend Stabilize the plan Get the plan back on track to 100% funded status

11

12 Recovery Goals Stop the downward trend Stabilize the plan Get the plan back on track to 100% funded status

13 NDPERS Main System Investment Returns

14

15 2013 Session Recovery Plan (last half)

16 Recovery Plan Last two years still needed Recommended by: – Legislative Employee Benefits Committee – In the Executive Recommendation Submitted as SB 2059 – Passed the Senate – Defeated in the House Provisions put in HB 1452 – Passed the Senate – Not concurred by the House Conference Committee – Amended to provide third year of recovery but not the fourth year

17 2013 Session Recovery Plan (last half) 2014 increase approved not 2015

18 2013 Session Recovery Plan also a DC option for State Employees Above assumes DC option is permenant, as passed it is only till the middle of 2017 consequently cost would be closer to blue. If permanent then additional cost would be as shown above.

19 Recovery Goals Stop the downward trend Stabilize the plan Get the plan back on track to 100% funded status?

20 2013 Session Recovery Plan also a DC option for State Employees

21 DC Option Temp option until July of 2017 Decision will need to be made to keep and if so how: – Option – Mandatory – How to pay for Existing DC member also want an option to elect back to Main PERS Plan

22 Study resolution HB 1452

23 Going Forward

24 Additional contribution increases will likely be needed in the future

25 Going Forward Additional contribution increases will be needed in the future DC plan costs will need to be added if continued

26 Going Forward Watch returns to determine if they help offset the need for additional contributions

27 20% funded status gap Returns could close this gap

28 Going Forward Last year of recovery plan may still be needed – year 4 (1% employer & 1% employee) DC plan costs will need to be added if continued Effect on political subdivisions will need to be considered and adjustments made if needed

29 29

30 Going Forward Last year of recovery plan may still be needed – year 4 (1% employer & 1% employee) DC plan costs will need to be added if continued Effect on political subdivisions will need to be considered and adjustments made if needed Should DC members get the opportunity to elect back to the DB plan

31

32 PERS PreMedicare Coverage - HB 1058 Main reason is “guarantee issue” that is a PERS member will also be able to get health insurance Credit is tied to PERS health insurance to encourage a broader cross section of retirees to take plan thereby helping rates Also an indirect subsidy for rates, shows on states financials ($95 per month for retiree plan and $5 per month for active plan) Implicit Subsidy on state financials of about 52 million and growing – not presently funded PreMedicare Retiree can stay on the PERS plan 102% of premium Thereafter at 150% for single, 2 to 2.5 times the single rate for family coverage 32

33 PERS PreMedicare Coverage - HB 1058 With implementation of ACA PERS premedicare retirees will be able to access health care in the marketplace without having to be exposed to medical underwriting or pre-existing condition provisions Credit will be portable to allow retirees a broader cross section of health coverages to consider Indirect subsidy for rates will state to be phased out in beginning in Implicit Subsidy on state financials will be reduced and eliminated in time for this coverage Is not effective until July of 2015 Only applies to new retirees after that date PreMedicare Retiree will still get 33

34 HEALTH INSURANCE

35 PERS Health Insurance Plan Rates and Plan design

36 Premiums BCBS PremiumSanford Premium 12.98% 25.49% 36

37 Premiums BCBS Premium % PERS BUYDOWN Final Premium for % About 5.5% per year

38 $95 per month toward increasing health insurance premiums, a 2.4 percent increase.

39 PERS Health Plan – Plan Design Plan Design – Grandfathered Status – Benefits Wellness Birth Control Considerations: Plan Design PPO/Basic HDHP/HSA 39

40 High Deductible Health Plan (HDHP) Plan premium is a little over 10% lower not including an HSA. This will be a Comprehensive Deductible and Coinsurance plan. There are no Copayments under this plan. Deductible will apply first dollar since there is no copay structure on Prescriptions. Because this is a Comprehensive HDHP a Member can exceed the $1500 Individual Deductible/Coinsurance. Will be available to political subdivisions later this year Political subdivisions can add a Health Saving Account feature if they so elect – such a feature would be separate from the PERS plan If a political subdivisions elects this option it would be for all employees. This plan is not “grandfathered” so a “grandfathered” political subdivision would lose that status if they elect this option

41 HB Eligibility Federal Law Full Time Employee State Law Full timeTemp Existing law Services are not limited in duration, who is filling an approved and regularly funded position and who is employed at least 20 hours per week and at least 20 weeks per year Not filling an approved and regularly funded position and is working at 20 hours per week for 20 weeks per year. New law Services are not limited in duration, who is filling an approved and regularly funded position and who is employed at least 20 hours per week and at least 20 weeks per year Average of 30 hours per week during a month subject to the employers look back period 100% employer premium payment No employer premium paymentEmployee pays only 9.5% of household income 1

42 AFFORDABLE CARE ACT (ACA) Upcoming compliance provisions

43 Significance of Full-Time Employee Status AFFORDABLE CARE ACT (ACA)

44 Significance of “Full-Time Employee” Status Employer Shared Responsibility rules apply only to “Applicable Large Employers” – Employed an average of at least 50 “Full-Time Employees” for more than 120 days during the preceding calendar year “Full-Time Equivalent” employees counted for this purpose only Special rule for seasonal employees Employer Shared Responsibility penalties apply only with respect to “Full-Time Employees” – Potential $2,000 penalty per FTE if coverage not offered to FTEs and their dependents – Potential $3,000 penalty for each FTE who opts out of the employer’s coverage if it isn’t “affordable” or doesn’t meet a “minimum value” threshold Note: Penalties are “potential” because they are imposed only if a FTE obtains coverage in a State Health Insurance Exchange and qualifies for a Premium Tax Credit or Cost- Sharing Subsidy AFFORDABLE CARE ACT (ACA)

45 Definition of “Full-Time Employee” The Employer Shared Responsibility rules only apply with respect to “Full-Time Employees” – “The term ‘full-time employee’ means, with respect to any month, an employee who is employed on average at least 30 hours of service per week.” IRC § 4980H(c)(4)(A). Because of the potential penalties associated with not offering coverage to “Full-Time Employees”, this definition raises many concerns – Can part-time employees become full-time employees from time to time, just because they work too many hours in a given month? – What about new employees, if the employer isn’t sure how much they will work? – Are there any special rules for temporary and seasonal employees? AFFORDABLE CARE ACT (ACA)

46 Ongoing and New Full-Time Employees AFFORDABLE CARE ACT (ACA)

47 Ongoing Employees Key Definitions – Ongoing Employee: any employee employed by the employer for at least one complete Standard Measurement Period – Standard Measurement Period: a defined time period, as chosen by the employer, of at least 3 – but no more than 12 – consecutive calendar months, used to determine full-time status for ongoing employees – Stability Period: the period during which coverage must be offered to those employees determined to be “full-time” during the relevant Standard Measurement Period in order to avoid Shared Responsibility penalties. AFFORDABLE CARE ACT (ACA)

48 New Variable Hour and Seasonal Employees AFFORDABLE CARE ACT (ACA)

49 New Variable Hour and Seasonal Employees Key Definitions – Variable Hour Employee: A new employee if, based on the facts and circumstances at the start date, it cannot be determined if he or she is reasonably expected to work on average at least 30 hours per week. Could include a new employee who is expected to initially work 30 hours or more per week for a limited duration. – Seasonal Employee: Employer can use reasonable, good faith interpretation through end of AFFORDABLE CARE ACT (ACA)

50 New Variable Hour and Seasonal Employees Key Definitions (Cont’d) – Initial Measurement Period: a defined time period, as chosen by the employer, of at least 3 – but no more than 12 – consecutive calendar months, used to determine full-time status for new variable hour and seasonal employees. AFFORDABLE CARE ACT (ACA)

51 SB 2060 Made administrative changes – IRS requirements – Benefit Options – Deferred comp revenue – DC plan survivor process

52 May 23, 2013

53  Business system replacement project ◦ One objective was to provide web-based self service functionality to our members ◦ On-line access to view and update benefit information ◦ PERSLink Member Self Service (MSS)  Retired members (January 2012)  Active members

54  Initially made MSS available to employees from 10 employers who volunteered to participate in a pilot program ◦ September – November, 2012 ◦ Available to approx. 5,200 employees ◦ Included DOT, ITD, OMB, PERS, YCC ◦ Made modifications based on feedback received

55  MSS will be made available to all employees, in waves, from April – September 2013 ◦ Available to all state employees starting in August 2013 ◦ Paper enrollment or change forms for NDPERS benefit plans will no longer be used ◦ Employees will use MSS to enroll in new benefit plans, make changes to existing enrollments and annual enrollment

56  NDPERS will provide notice when MSS is available to your employees  NDPERS will provide you with a communication to send out to your employees notifying them of MSS availability  Instructional guides and on-line tutorials are available on the NDPERS website to assist you and your employees

57  Personal Profile ◦ View Personal information on record at NDPERS ◦ Update Name/Marital Status ◦ Update Address, Telephone numbers, and address  NDPERS Plans ◦ Displays all the NDPERS benefit plans enrolled in or eligible to be enrolled in ◦ View Plan Details Document ◦ View Plan Highlights Video ◦ Provides links to individual plan details to view or update enrollment

58  Member Account Balance ◦ Provides a direct link to the NDPERS Retirement Plan Member account balance details  Benefit Estimates ◦ Calculate a retirement benefit estimate on-line ◦ Request an official estimate from NDPERS ◦ View benefit estimates performed

59  Service Credit Purchase ◦ Calculate a service purchase cost estimate on-line ◦ Request an official service purchase cost from NDPERS ◦ View service purchase contracts  Annual Statements ◦ View detailed annual statement of accounts

60  Set up employee in PERSLink Employer Self Service (ESS) ◦ This information is used to determine the benefit plans the employee is eligible for and their eligibility dates  Working on getting this information from PeopleSoft  Provide new employee with their PERSLink ID ◦ Assigned by NDPERS ◦ Employer can access through ESS ◦ NDPERS will mail out a welcome letter that directs employee to go to MSS to complete their benefit enrollments  New hire kit no longer needs to be filled out

61  Employee will enroll in NDPERS benefits using MSS ◦ Only benefit plans that employee is eligible for will display ◦ Several validations built in to prevent bad data ◦ Enrollment required for EAP  Some paper forms are still required ◦ Designation of Beneficiary for Retirement ◦ Designation of Beneficiary for Life Insurance ◦ Long Term Care Plan ◦ Life Insurance Evidence of Insurability  Employer will be notified of benefit enrollments on the Benefit Enrollment report in ESS ◦ Use in place of enrollment forms, to update the PeopleSoft payroll system

62 For employees changing their benefit enrollments  Paper forms no longer need to be filled out  Employee can make benefit changes using MSS  Employer will be notified of benefit enrollments on the Benefit Enrollment report in ESS ◦ Use in place of paper enrollment forms, to update the PeopleSoft payroll system

63  NDPERS Website ◦ NDPERS Member Self Service Employee Guide  On Homepage, NDPERS PERSLink Member Self Service Icon ◦ NDPERS Member Self Service Employer Guide  Under Employer Services, Program Administration ◦ Quick Tutorials  Narrated navigation for Employers & Employees

64 Questions?


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