Open Enrollment begins Oct. 10
New health care plan choices mean all eligible faculty, staff must reenroll
Open Enrollment for calendar year 2007 begins Oct. 10 and ends Nov. 30.
Because there are new and different health care plan choices for 2007, all eligible faculty and staff must elect a University sponsored health care plan or waive participation. Those who are currently enrolled and do not reenroll for 2007 will have coverage assigned, coverage that may not be the best fit for their personal circumstances.
There are no changes in dental or vision coverage choices or services. Both will offer four coverage tiers just like the health care plans. Enrollment in these two plans is not required though individuals currently with family coverage should enroll their dependents to have the coverage tier that best fits their personal circumstances. Like the health care plan, children are covered through age 22. This is a change from current eligibility which covers children through age 18, and if they are a full-time student, through age 22.
Open Enrollment is the one time each year when the University announces benefit plan changes and monthly premium contribution rates for the next calendar year. It is the period to enroll or re-enroll in the Flexible Spending Account (FSA), Health Care or Dependent Care Accounts for participation in either or both plans for the upcoming calendar year.
As a result of efforts to address the recent trends of rising health care costs to faculty and staff as well as to the University, efforts were initiated last year to determine a strategic course for long-term health care plan design options. Focus groups were conducted among faculty, staff and University administrators. These focus group discussions established a number of principles that became the basis of the University’s strategy, including offering competitive benefit plans; having innovative plan features which differentiate the University from other employers’ plans; providing information and resources to enable individuals to make informed and appropriate health care decisions; as well as managing health care costs below market trends.
Major health care changes for 2007 include three PPO (preferred provider organization) plans, including one with a heath savings account (HSA) feature, and two health maintenance organization (HMO) plans.
Northwestern also offers two types of flexible spending accounts (FSA): a health care FSA and a dependent care FSA.
To facilitate the enrollment process, enrollment will be online using a new “Self-Service” feature called eBenefits. Faculty and staff members will be able to log onto eBenefits via the benefits division Web site to view a list of benefit plans for which they are eligible. (Beginning the week of Oct. 10, individuals will be notified by e-mail that e-Benefits is available to them.)
The Open Enrollment decisions one makes for 2007 will be binding for the year unless one has a qualifying change in employment or family status (marriage, birth of a child, adoption, etc.) and completes the online enrollment process within 31 days of the status change.
Coverage Tier Changes
The way premium deductions are structured for the health care plans has changed. The number of coverage tiers will increase from two (single and family) to four tiers that reflect family members covered by the health, dental, and vision plans. The four new coverage tiers will be: you only; you and spouse; you and child(ren); and you and spouse and children.
These changes are designed to reflect the range of financial — and personal – circumstances among faculty and staff.
HMOs: A health maintenance organization (HMO) is a health care plan that provides care from a network of physicians and hospitals that you must use in order to receive benefits under the plan. If you are enrolled in an HMO, you must select a primary care physician to help coordinate your care with other network providers.
When the University developed its long-term health care strategy, a key element was to maximize the value of HMO benefits by reducing the number of HMO plans for faculty, staff and their families. As a result, the University is offering two HMO choices for 2007: HMO Illinois and UniCare.
If you are currently enrolled in either the Aetna or Humana HMO plans, you will need to select a new health care plan for 2007.
PPOs: A preferred provider organization (PPO) is a health care plan that provides care from a network of physicians, specialists and hospitals that have agreed to provide services and accept payment at negotiated rates. PPOs provide you the flexibility to visit providers within or outside the network without referrals. Benefits are higher when an in-network provider is used.
There are three PPO plans: two traditional PPO plans and a third PPO plan that includes a health savings account. All three options provide coverage for the same types of health care services. The plans differ in the amount of monthly premium and how you and the plan pay the costs of services.
Flexible Spending Account (FSA)
Northwestern offers two types of FSAs: a health care FSA and a dependent care FSA. You may enroll in one or both.
An FSA is a tax-advantaged account into which you make contributions for eligible health care or dependent care expenses. These expenses include out-of-pocket costs such as deductibles, copayments, over-the-counter medications and some health care services that aren’t covered by the health care plan. Eligible dependent care expenses include items like adult and child daycare, “nanny” salary and taxes, day camp and camp activities, and summer sports camp. During the year, as you incur eligible expenses, you may seek reimbursement from these accounts.
When enrolling in an FSA, you need to carefully estimate your eligible expenses for the year because any unused funds in your account at the end of the year are forfeited. Even if you enrolled in an FSA for 2006, you must reenroll during open enrollment to continue participation in a flexible spending account in 2007.
HMO Illinois is offered by Blue Cross Blue Shield of Illinois. The Provider Network includes physician groups affiliated with Evanston Northwestern Healthcare (ENH), Advocate-Lutheran General, and St. Francis hospitals. It does not include physicians affiliated with the Northwestern Medical Faculty Foundation (NMFF).
The prescription drug program is administered by Walgreens Health Initiatives and includes a broad network of most major retail drugstore chains and many independent pharmacies. Maintenance medications may be obtained at a cost savings via mail order.
$25 physician office visit copayment
$500 inpatient deductible
$250 outpatient surgery deductible
Prescription drug copayments of
• $5 generic drugs; $10 mail order
• $25 preferred drugs;
$45 mail order
• $45 nonpreferred drugs;
$65 mail order
UniCare HMO is an operating affiliate of Wellpoint Health Networks, Inc., one of the nation’s largest managed care companies. It is a joint venture by Rush-Presbyterian-St. Luke’s Medical Center and the Prudential Insurance Company of America.
The Provider Network includes physicians affiliated with the Northwestern Medical Faculty Foundation (NMFF), Northwestern Memorial Physicians Group (NMPG), St. Francis Hospital and Advocate-Lutheran General. It does not include ENH-affiliated physicians.
The prescription drug program is administered by Wellpoint Pharmacy Management and includes a broad network of most major retail drugstore chains and many independent pharmacies. Maintenance medications may be obtained at a cost savings by mail order.
$25 physician office visit copayment
$300 inpatient deductible
$250 outpatient surgery deductible
Prescription drug copayments of
• $5 generic drugs; $10 mail order
• $25 preferred drugs; $45 mail order
• $45 nonpreferred drugs; $65 mail order
The Premier PPO provides the same level of benefits as the current PPO plan – Plan A. It offers the lowest deductible and coinsurance, plus flat dollar copayments for physician office visits and prescription drugs. It has the highest premium.
The Select PPO offers lower monthly premiums but higher deductibles and coinsurance. Physician office visits and prescription drugs are also subject to a flat dollar copayment under this plan.
The Value PPO plan with a Health Savings Account (HSA) is an innovative plan that offers the lowest monthly premium but higher out-of-pocket costs. Physician office visits and prescription drugs are subject to the deductible and coinsurance rather than a flat dollar copayment. It also offers an HSA — a Health Savings Account that is a new tax-advantaged way to save money that may be used to pay for current and future health care expenses. Out-of-pocket health care expenses can be paid from an HSA.
If your annual health care expenses do not deplete the HSA by the end of the year, the remaining balance is available in the next year, plus any new savings added to the account. Interest and other investment returns on your HSA balance are not taxed; withdrawals from the HSA are tax-free when the funds are used to pay for health care services (including COBRA and retiree health insurance premiums).
Once you reach the deductible of $250 for individual coverage (or $750 for family coverage), you pay 10 percent of eligible health care expenses (coinsurance), and the plan pays the remaining 90 percent of eligible charges.
You pay a $25 copayment for physician office visits. For prescription drugs, you pay a flat dollar copayment, depending on the kind of medication and whether you purchase a 30-day supply in a retail store or a three-month supply by mail.
The annual out-of-pocket maximum cost for hospital and physician services for the Premier PPO plan is based on your University salary as of Sept. 1, 2006:
If you earn under $40,000 per year, the out-of-pocket maximum is $1,000 for an individual and $3,000 for a family. If you earn between $40,001 and $120,000 per year, the out-of-pocket maximum is $2,000 for an individual and $5,000 for a family. If you earn $120,001 or more, the out-of-pocket maximum is $3,000 for an individual and $8,000 for a family.
Once you reach your out-of-pocket maximum, the plan pays 100 percent for covered services. Administering the out-of-pocket maximum by income is designed to help individuals avoid financial bankruptcy due to catastrophic health care expenses.
There is an annual deductible of $500 for individual coverage and $1,500 for family coverage. Once you meet the deductible, you pay 20 percent coinsurance — a higher percentage than under the Premier PPO plan — and the plan pays the remaining 80 percent. You have the flexibility to choose any doctors, but you’ll pay less for care received from in-network providers. The flat dollar copayment for physician office visits and cost structure for prescription drugs are the same as under the Premier PPO plan.
The annual out-of-pocket maximum for hospital and physician services for the Select PPO plan is also based on your University salary as of Sept. 1, 2006:
If you earn up to $40,000, your out-of-pocket maximum is $1,500 for individual coverage and $4,500 for family coverage. If you earn between $40,001 and $120,000, your out-of-pocket maximum is $3,000 for individual coverage and $7,000 for family coverage. If you earn $120,001 or more, your out-of-pocket maximum is $4,000 for individual coverage and $9,000 for family coverage.
The first part of the Value PPO plan offers a high deductible health care plan providing valuable coverage with a lower up-front monthly premium contribution. You have the flexibility to choose any doctors, but you’ll pay less for in-network providers. In return for the lower up-front premium, you will pay a higher deductible before the plan pays benefits.
The deductible is $1,200 for individual and $2,400 for family coverage. But you can pay for the deductible with tax-free money from your HSA.
Preventive care in the plan is always covered 100 percent, meaning you do not pay a deductible or coinsurance, and no deductions are needed from your HSA.
The second part of the Value PPO plan is a health savings account (HSA). You contribute money, tax-free, through payroll deductions to your HSA. HSA dollars can be used to pay for current and future health care expenses such as deductibles and coinsurance. The money you put away can be used later for retiree medical expenses or COBRA premiums when you leave the University.
Unlike a traditional flexible spending account (FSA), whatever funds you don’t spend this year from your HSA roll over and are yours to keep because you own your HSA. You keep your account even if you change health care plans, leave the University, or retire.
Your annual out-of-pocket maximum for the Value PPO plan is based on your University salary as of Sept. 1, 2006:
If you earn up to $40,000, your out-of-pocket maximum is $2,000 for individual coverage and $6,000 for family coverage. If you earn between $40,001 and $120,000, your out-of-pocket maximum is $4,000 for individual coverage and $8,000 for family coverage. If you earn $120,001 or more, your out-of-pocket maximum is $5,000 for individual coverage and $10,000 for family coverage.
You and your dependents must be enrolled in a high-deductible health plan, such as the University’s Value PPO plan, and you cannot have other health insurance coverage. You may not enroll in a traditional health care flexible spending account (FSA). Instead, you will have the option to participate in a “limited-use” FSA that can be used to pay for dental and vision expenses. Unlike the Premier and Select PPO plans, the annual out-of-pocket maximum for the Value PPO plan includes prescription drug costs in addition to hospital and physician costs. To help cover health care expenses while you build your health savings account in its first year, the University will match your contribution, up to half of the annual deductible, tax-free. For every $1 you contribute, the University will contribute $1.
The University’s matching contribution will be deposited into your HSA in early January 2007 to provide a one-time bridge to help you pay for immediate health care costs (if any) before your paycheck contributions begin accumulating in your HSA.
For example, you enroll in the Value PPO for single coverage and open an HSA.
The maximum amount that may be contributed to your HSA for the year is $1,200, which is also the amount of the individual deductible under the plan. (The minimum annual contribution is $240.) So, if you pledge to contribute $600 to your HSA during calendar year 2007 (at the rate of $50 a month), the University will contribute $600 in early January 2007. This puts a total of $1,200 in your HSA — in its first year. If you’re age 55 or older, you can make an additional $800 “catch-up” contribution to your HSA in 2007. The University will match up to half of the catch-up contribution as well.
2007 HEALTH CARE PLAN COVERAGE HIGHLIGHTS
What IS NOT changing...
> Northwestern still pays most of the cost for coverage
What IS changing...
> New and different